- Bitcoin’s price has sharply increased, crossing $111,000 after a recent flash crash.
- Binance founder Changpeng “CZ” Zhao predicted a $28 trillion value for bitcoin in the long term.
- The Federal Reserve plans to halt its quantitative tightening, which has been reducing its $6.6 trillion balance sheet.
- Market analysts anticipate renewed money printing and further interest rate cuts following the Fed’s shifts.
- Bitcoin’s surge aligns with Gold’s as investors seek assets resistant to inflation and fiat currency devaluation.
Bitcoin experienced wide price swings this month amid concerns triggered by public statements, including warnings about a potential dollar and financial crisis. Recently, the cryptocurrency rebounded from a flash crash that had pushed it close to $100,000, rising nearly 10% to exceed $111,000.
According to Binance founder Changpeng “CZ” Zhao, bitcoin could eventually reach a valuation of $28 trillion. U.S. President Donald Trump has also suggested a $2,000 Covid stimulus check-style tariff dividend. This backdrop arrives as Wall Street prepares for the Federal Reserve to end its quantitative tightening—a process aimed at reducing the money supply—raising expectations of fresh rounds of money printing that could further increase Bitcoin’s price to potentially $1 million.
Arthur Hayes, co-founder of crypto derivatives company Bitmex and head of Maelstrom investment, highlighted in an interview with the crypto news outlet Milk Road that the tightening phase is ending. He explained that the Fed plans to inject trillions of dollars into mortgage markets, lowering interest rates and creating conditions favorable for asset appreciation. Quantitative tightening reduced the Fed’s balance sheet from about $9 trillion to $6.6 trillion since 2022, withdrawing liquidity from financial markets.
Fed Chair Jerome Powell recently stated, “Our long-stated plan is to stop balance sheet runoff when reserves are somewhat above the level we judge consistent with ample reserve conditions,” suggesting an end to this liquidity reduction. Analysts from JPMorgan and Bank of America predict the Fed will halt its balance sheet shrinkage soon, a step that would stop draining liquidity from the market. They expect additional interest rate cuts, with a 25 basis point reduction likely next week.
Inflation data for September showed a slower rise in U.S. inflation than expected, at 3%, below economists’ forecasts. According to Trade Nation’s senior analyst David Morrison, this could encourage the Fed to implement larger or additional rate cuts, as the central bank prioritizes concerns over the labor market above inflation.
Bitcoin’s recent climb mirrors the rally of gold over the past year, both viewed as hedges against the declining buying power of the U.S. dollar due to inflation and monetary expansion. Arthur Hayes stated, “Those who have the foresight… they are voting with their money and they’re saying, ‘I want gold. I want bitcoin. I want silver. I want stocks.’ I just think that crypto is the fastest horse.” This trend, often called the “debasement trade,” reflects increased interest in assets that resist fiat currency devaluation.
For more details, see the original articles: ‘It Will Happen’—Binance’s CZ Issues Massive $28 Trillion Bitcoin Prediction As Crypto Braces For ‘Inevitable’ Price Shock and ‘It’s Game Over’—‘Imminent’ Fed U.S. Dollar ‘Crisis’ Predicted To Spark Bitcoin Price Tipping Point As Gold Soars.
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