PROD TEST News - Revision 4

Expectations are rising that Bitcoin will benefit this year as liquidity flows into global markets on the back of the U.S. Federal Reserve’s (Fed) monetary policy easing. Analysts say risk appetite for investments that had been damped by a tightening bias is likely to rebound.

On the 1st (local time), Bill Barhydt, CEO of Abra, said in an interview with Schwab Network that “the Fed is already laying the groundwork for an easier policy stance.”

Barhydt described the Fed’s recent moves as a “lite version of quantitative easing (QE).” He said, “The Fed has begun buying bonds on its own to support demand for Treasuries,” adding, “Next year, demand for Treasuries is likely to decline alongside falling interest rates, and that combination is a positive signal for all assets, including Bitcoin.”

He also cited greater U.S. regulatory clarity and expanding participation by institutional investors as additional catalysts beyond liquidity provision. “As low rates and clearer regulation converge, the digital asset market will post strong growth for years,” Barhydt said, predicting the upturn will not be a one-off cycle.

Still, some caution that it is premature to expect sharp rate cuts in the near term. According to CME FedWatch, traders see a 14.9% probability of a rate cut at the January Federal Open Market Committee (FOMC) meeting. That is a steep drop from 23% on Nov. 1, suggesting that a policy pivot could be delayed beyond market expectations.

Others also urge caution, arguing Bitcoin is more likely to trend steadily higher than surge explosively. Matt Hougan, chief investment officer (CIO) of Bitwise, said in an interview last week that “Bitcoin will see strong but gradual gains over the next 10 years.” He added, “Investors should expect lower volatility and steadier performance than the explosive returns seen in past cycles.”