Bitcoin could rally regardless of what the Federal Reserve FOMC decides this week: Here’s why
The US Federal Reserve Open Market Committee (FOMC) is expected to maintain interest rates during its May 7 meeting, which could influence risk-on assets like cryptocurrencies. A potential liquidity injection by the US Treasury to combat recession risks may benefit Bitcoin and altcoins. Analysts suggest that a rate cut might not effectively stimulate growth due to ongoing recession risks, creating a favorable environment for cryptocurrencies as alternative hedge assets. Historical patterns indicate that when Fed funds exceed a neutral rate, economic downturns often follow. Pressure from President Trump on the Fed to lower rates is significant. Current market expectations show a 76% chance of rates at 4.0% or lower by September, down from 90%. Despite reduced confidence in rate cuts, recent Treasury bond purchases signal potential intervention, which could be bullish for cryptocurrencies. The US Dollar Index has fallen below 100, while gold prices have risen significantly, indicating a shift towards scarce assets like Bitcoin amid economic uncertainty.
