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The bitcoin price has more than doubled over the last 12 months, sparking wild rumors of a secret “sovereign” bitcoin bid.
Now, after BlackRock quietly opened the door to a “trillion dollar-plus” Wall Street game-changer, a predicted 2024 Federal Reserve “bailout” for U.S. president Joe Biden could be about to cause chaos for the bitcoin price and crypto market.
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U.S. president Joe Biden is grappling with a stalling economy ahead of the 2024 election, with the … [+]
“The Fed is preparing a Biden bailout,” David Sacks, a technology investor, posted to X. “It has revised down inflation projections for 2023 and 2024 and is signaling upcoming rate cuts.”
U.S. inflation has plummeted from a peak of just over 9% to 3.2% over the last year as the supply chain returns to normal following the shock of Covid lockdowns and unprecedented government stimulus.
The economy has so far avoided recession, though many are seeing recession signals flash—something that would likely damage president Biden’s already spiraling poll numbers heading into an expected rematch of 2020’s White House battle with former president Donald Trump.
This week, Federal Reserve chair Jerome Powell triggered a stock and crypto market surge when he struck a dovish tone following the Fed’s latest interest rate decision meeting and revealed official Fed projections that show 75 basis points in cuts in 2024.
“Declaring victory would be premature,” Powell said during a press conference. “But, of course, the question is ‘when will it become appropriate to begin dialing back?'”
Powell’s comments and the Fed’s long-awaited flip sent the U.S. dollar sharply lower this week with an even weaker dollar forecast in 2024 by a majority of analysts surveyed by Bloomberg.
“We are receiving positive signals from the Federal Reserve about a pivot from rate hikes to rate cuts,” Rachel Lin, the chief executive of SynFutures, said in emailed comments. “This will likely be a positive development for the crypto market. Next year, we will likely see a confluence of rate cuts, bitcoin halving, and increased election spending.”
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The bitcoin price has rocketed this year after a huge 2024 bitcoin price crash.
Meanwhile, Treasury secretary Janet Yellen “is hard at work pumping U.S. dollar liquidity into the financial markets,” bitcoin and crypto investor Auther Hayes, the former chief executive of crypto derivatives pioneer Bitmex, posted to X, predicting the bitcoin price will surge to $1 million—something that would give the combined bitcoin network a market capitalization of around $20 trillion.
This week, Yellen predicted inflation would fall sharply in 2024, coming back in line with the Fed’s 2% target and bringing interest rates back down with it.
“As inflation moves down, in a way, it’s natural that interest rates come down somewhat because real interest rates would otherwise increase, which would tend to tighten financial conditions,” Yellen told CNBC.