Bitcoin Price Volatility and U.S. Crackdown
In recent weeks, the bitcoin price has fluctuated between $70,000 and $50,000 as traders anticipate a new U.S. cryptocurrency crackdown. This comes in tandem with Apple's significant update to its Wallet app, further influencing market dynamics.
Potential Impact of Janet Yellen's Market Moves
Former President Donald Trump's proposal to use bitcoin to address the U.S.'s $35 trillion debt has sparked considerable debate. However, attention has recently shifted to U.S. Treasury Secretary Janet Yellen, who is poised to inject up to $1 trillion into markets by the end of 2024. This move, predicted by a legendary trader, could potentially lead to a bitcoin price surge.
Arthur Hayes, co-founder of BitMex and Maelstrom investment fund, anticipates Yellen will inject $301 billion to $1.05 trillion into the markets. Hayes suggests this liquidity could spur a bull market in various risk assets, including crypto, just in time for the election season.
China's Potential Influence on the Crypto Market
Hayes also forecasts that China will unleash a significant fiscal stimulus, potentially sparking a crypto bull market. As China's economy faces challenges, expectations grow that the central bank will implement stimulus measures. In light of this, comments from crypto entrepreneur Justin Sun and investor Brock Pierce suggest China may soon welcome bitcoin and cryptocurrency once more.
Bitcoin's Forecasted Trajectory
According to Hayes, the next target for bitcoin is $100,000, with an eventual surge to $1 million as his "base case." This bullish outlook assumes China's stimulus and Yellen's moves will create favorable conditions for smaller cryptocurrencies as well.
Current Market Sentiment and Concerns
Despite the potential for a price rally, the overall sentiment remains cautious. The bitcoin market has struggled to regain early-year momentum, partially due to concerns over potential U.S. sales of seized bitcoin and Wall Street's tentative crypto adoption. Alex Kuptsikevich, FxPro's senior market analyst, highlights the selling pressure from U.S. government wallets as a key factor.
The psychological impact of increased bitcoin supply, alongside fears of regulatory tightening, could lead buyers to hesitate, waiting out the current market uncertainties.
