As the crypto world expects pro-cryptocurrency rules from the Donald Trump administration, BitMEX co-founder Arthur Hayes believes the Fed’s monetary action could build new momentum for Bitcoin’s (BTC) price since the coin keeps reacting to monetary policies and potential new regulations.
Hayes stated his view in a Jan. 7 blog post, explaining that the Fed would likely add $612 billion in liquidity before the end of March 2025, which will cause a surge in Bitcoin’s price. This Fed action would reduce traders’ anxiety as they anticipate crypto-friendly policies from the incoming regime.
At the time of this report, BTC currently trades at $94,969 (below the $100,000 psychological resistance point) after a 2.7% drop in the past 24 hours. Even though many industry participants expect Trump’s inauguration to impact the crypto market positively, any delay in implementing the expected favorable regulations could cause a decline in crypto prices since investor sentiment would be dampened.
However, Arthur Hayes argued that the additional liquidity to the US Treasury could neutralize any disappointment. Hayes also predicts that BTC will hit a local top in March since money printing will soar after Trump’s inauguration. However, there will be a correction after that period.
Analysts believe BTC’s price fell below $100,000 because many institutional traders were inactive towards the end of 2024. However, the incoming “liquidity boost” can propel Bitcoin beyond $100,000.
Binance Research also supported Arthur Hayes’ view, stating that the leading crypto asset will only sustain its price above $100,000 should the factors that enabled it to trade above this level remain in place. Such factors include the US Fed’s policy path for this year and the implementation of favorable crypto regulations.
Experts also forecast BTC to trade at $150,000 by Q4 of 2025 due to a $2 trillion investment in BTC products, driven by a possible $20 trillion increase in the global money supply.
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