The Fedโs Biggest Fear Is Coming True as Bitcoin Nears $100,000
Bitcoin$BTC is rapidly approaching the $100,000 mark, reaching levels not seen since before the marketโs tariff-driven turbulenceโfueled in part by a projected $10 trillion surprise on Wall Street.
The price of bitcoin has jumped nearly 30% since hitting its April lows, driven by growing concerns about the U.S. dollar's future.
โThe Fedโs worst nightmare is becoming reality,โ analysts from The Kobeissi Letter wrote on X. โThe market recognizes that stagflation has arrived.โ$ETH
Recent data from the Commerce Department showed U.S. GDP contracted at an annualized rate of 0.3% in the first quarter, with a surge in imports weighing heavily on the economy. Analysts also highlighted that the Fedโs preferred inflation gauge, the PCE price index, was flat in March after a 0.4% increase in February.
โThe PCE is now at its highest level since July 2024โbefore the Fed began pivoting on policy,โ Kobeissi added.
โWe're seeing inflation rise while the economy weakens,โ Kobeissi noted. โThe Fed is now in a lose-lose situation they hoped to avoid.โ
With the Fed set to meet next week, markets expect rates to remain unchanged. However, many traders are betting that cuts will begin in Juneโa move that typically favors bitcoin and other risk assets.$TRUMP
โA shift toward easier monetary policy is good news for bitcoin, as more liquidity tends to flow into riskier investments,โ said Tracy Jin, COO of crypto exchange MEXC.