Fed’s $4.1 Trillion Dire Warning for 2025 Raises Fears of $20,000 Bitcoin Price Collapse

Bitcoin has retreated from its all-time high of over $100,000 last week BlackRock quietly confirmed the alarming Bitcoin bombshell.

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The price of Bitcoin fell to $90,000 per Bitcoin, With the Federal Reserve’s “biggest nightmare” impacting the cryptocurrency market.

now, Donald Trump also confirms that he has big plans for BitcoinA $4.1 trillion drop in the global money supply could be on the verge of causing Bitcoin’s price to collapse to $20,000, a financial analyst has warned.

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Forbes“Turning Point” – Cryptocurrencies Prepare for $280 Trillion Bitcoin Reserve Price After Trump Pickby Billy Bambrough

“In the past, Bitcoin prices have followed the global money supply with a lag of approximately 10 weeks,” analysts at The Kobeissi Letter said. to publish To X asking: “Is Bitcoin overdue for a correction?”

Kobeissi analysts pointed out that the money supply decreased by $4.1 trillion, to $104.4 trillion, the lowest level since August, after peaking at $108.5 trillion in October.

“If the relationship still holds, this suggests that Bitcoin prices could fall by as much as $20,000 over the next few weeks. The surge in Bitcoin’s price may take a pause.”

The Fed, which controls the money supply through monetary policy, has been struggling to control inflation this year while also trying to lower interest rates to prevent the economy from falling into recession.

Last week, the Fed cut interest rates by 25 basis points even though rates were starting to rise again, but indicated it would move more slowly along the expected path of rate cuts next year.

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ForbesBlackRock quietly confirmed a devastating bombshell for Bitcoin pricesby Billy Bambrough

The Fed’s economic forecasts and Chairman Powell’s press conference suggest that inflation will be more persistent than previously thought. This means that they will continue the current cycle of lowering interest rates slowly and with caution against inflation, which appears to be accelerating again during the coming period. “In the past two months,” Yuya Hasegawa, a Tokyo-based bitcoin and cryptocurrency market analyst at Bitbank, said in email comments.

“There is also a chance for the Fed to stop cutting interest rates at some point during 2025 if inflation gets too hot and, in a worst-case scenario, might start raising rates again. Monetary easing has almost always favored the price of Bitcoin, and the opposite has been negative.” Impact on price.”

US debt has soared in recent years, topping $34 trillion at the start of 2024, as coronavirus stimulus measures and lockdowns fuel massive government spending and help send inflation out of control in 2022.

Inflation exceeding 10% forced the Federal Reserve to raise interest rates at a historic rate, resulting in higher debt interest payments and Which raises fears of a “death spiral.”

“While a potential shift in Fed policy will likely put pressure on bitcoin, higher interest rates will continue to put pressure on the government’s debt payments as well,” Hasegawa said.

“The swelling federal government debt is already raising questions about its sustainability and the credibility of the government could gradually become one of the topics the market will pay attention to in 2025.”