- Bitcoin prices rebounded after a recent downturn, amid growing speculation about Federal Reserve and U.S. government policy changes.
- Key figures in the industry and Wall Street institutions suggest bitcoin may soon be given similar status to Gold, influencing global reserve strategies.
- Market volatility increased due to looming concerns over a possible U.S. federal government shutdown and continued U.S. dollar decline.
- Analysts remain divided on the future course of bitcoin, with forecasts ranging from significant gains to an imminent bear market.
- U.S. policy developments, including the creation of a national bitcoin reserve, are contributing to increased attention from both governments and investors.
Bitcoin prices have recovered after a steep fall earlier this month, prompted by investor anxiety about potential changes in Federal Reserve policy. The price fell below $109,000 last week but has since risen above $112,000. This recovery aligns with continued uncertainty about the U.S. government’s actions and wider market trends.
The price improvement occurs as the Federal Reserve is reportedly considering placing bitcoin on an equal footing with gold. According to statements from prominent bitcoin developer Samson Mow, the creation of a U.S. bitcoin reserve could trigger major action from other governments, as they try to match America’s crypto reserves. “I think it is simply a matter of time before we see a massive run-up, and we see a massive nation-state FOMO, you know, panic,” Mow said in an interview.
Price trends show that bitcoin has increased nearly 5% since reaching lows of around $108,000 over the weekend. This uptick occurred alongside a rise in gold prices, attributed to growing expectations of a U.S. federal government shutdown. The U.S. dollar has fallen over 10% this year, putting it on track for its worst annual performance since 1973. Analysts from The Kobeissi Letter wrote, “The U.S. dollar is now on track for its worst year since 1973, down over 10% year-to-date.”
Data from the crypto prediction platform Polymarket shows an over 80% chance of a U.S. government shutdown in 2025. Traders also see a 78% chance of a shutdown by Wednesday, showing heightened market concern (source).
Earlier reports from Fidelity predicted that more central banks and government reserves would include bitcoin alongside gold. Last week, Deutsche Bank analysts suggested bitcoin could be given a similar role to gold in the Federal Reserve’s balance sheet by 2030.
In March, U.S. President Donald Trump delivered on a promise to create a national bitcoin reserve. Treasury Secretary Scott Bessent confirmed last month that the administration is looking for budget-neutral strategies to establish this reserve.
Despite significant growth following the 2023 U.S. election, the bitcoin rally has slowed through 2025, with some analysts split on the market’s next direction. John Glover, chief investment officer at Ledn, stated, “In the one camp are people like myself, who are forecasting higher prices in to year end.” Others believe the bull market may have ended when bitcoin hit $125,000.
For now, debate continues among investors about whether bitcoin will surge toward new highs or if a downward trend is ahead.
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