Federal Reserve’s Liquidity Injection May Drive Bitcoin’s Surge
Bitcoin could surpass $110,000 before retracing to $76,500 as the US Federal Reserve moves towards easing monetary policy, according to BitMEX co-founder Arthur Hayes.
In a post on X, Hayes argued that the Fed’s shift from quantitative tightening (QT) to quantitative easing (QE) for treasuries could inject liquidity into financial markets, boosting Bitcoin’s price. “I bet $BTC hits $110k before it retests $76.5k,” he stated, dismissing concerns that tariffs might negatively impact the cryptocurrency. Hayes also described inflation as “transitory,” downplaying its long-term impact on market movements.
Bullish Outlook Amid Economic Shifts
Markus Thielen, founder of 10X Research, also sees Bitcoin poised for a rebound. In a March 23 report, he suggested that Bitcoin may have reached its recent low and is set for a recovery.
Thielen pointed to the Fed’s dovish approach to inflation and former US President Donald Trump’s flexible stance on tariffs as key factors that could boost investor confidence. “The Fed signalled it might look past short-term inflationary pressures, laying the groundwork for potential future easing,” he noted.
The analyst also highlighted broader market trends, including the behavior of long-term Bitcoin holders and the performance of exchange-traded funds (ETFs). Thielen believes Bitcoin is unlikely to enter a deep bear market due to the strong presence of long-term investors.
ETF Inflows Signal Market Strength
The return of inflows into US-based spot Bitcoin ETFs further reinforces bullish sentiment. Data from Farside Investors revealed that these funds saw net inflows of around $744 million last week, with BlackRock alone attracting approximately $537 million.
Despite the positive indicators, Thielen acknowledged the absence of a “clear catalyst” for an immediate parabolic rally.
Bitcoin Trading Near $87,000
At the time of writing, Bitcoin was trading at approximately $87,000, marking a 3.5% gain in the last 24 hours, according to CoinGecko. The total cryptocurrency market capitalisation also saw a slight increase, reaching $2.9 trillion.
