- The FOMC maintained its federal funds rate between 4.25% and 4.50% in its first meeting since Trump’s return to office, with suggestions that quantitative tightening might soon transition to easing.
- Despite the positive momentum, analysts warn investors against overconfidence, suggesting the Fed won’t implement quantitative easing unless rates approach zero.
- BlackRock’s global head of digital assets Robbie Mitchnick expressed bullish sentiment on Bitcoin.
- He highlighted its 15% price increase since Trump’s re-election, comparing it to “digital gold”.
The US Federal Open Market Committee (FOMC) has held its first meeting since Donald Trump returned to the White House. As expected, it is keeping its benchmark federal funds rate unchanged between 4.25% and 4.50%.
However, there are speculations whether quantitative tightening might make room for quantitative easing soon, which would see more money entering markets. This has caused crypto assets to rally, with Bitcoin up 4% in the past 24 hours, reaching US$86,118 (AU$135,930) at the time of writing.
Others, like Ethereum, XRP and Solana have also seen price surges, with 5%, 10% and 6.6% respectively.
Related: Anti-woke Solana Ad Lasts Less Than Day After Community Backlash
Investors Overconfident, Despite Good News, Say Analysts
Solana’s price increase comes amid bullish news with the first-ever Solana exchange-traded funds (ETFs) launching in the United States:
XRP also had some good news of its own, with the US Securities and Exchange Commission (SEC) dropping a legal battle with Ripple that spanned more than four years.
All this combined was enough for investors to turn bullish, but the founder of The Coin Bureau, Nic Puckrin, said that investors shouldn’t get ahead of themselves with their expectations.
According to a statement which The Block has obtained, Puckrin said “ investors are already salivating at the prospect of quantitative easing”, but would “likely be sorely disappointed very soon”.
Puckrin believes the Fed is not going to be “turning on the money printer” unless rates are nearing zero. Any meaningful financial stimulus would have to come from the EU or China, he added.
No QE soon? Brett, a data nerd with over 14k followers on X, supports that view, stating on the platform that QE is really an “emergency action to stimulate” struggling markets.
Everyone holding their alt bags waiting for QE, may have to wait much longer than they think.
@brett_ethBlackRock Bullish on Bitcoin as IBIT Benefits from Buyers’ Bonanza
But the real value and institutional adoption of Bitcoin isn’t really reflected in the current price, BlackRock’s global head of digital assets, Robbie Mitchnick, told YahooFinance’s Market Domination Overtime program.
Mitchnick said that while he wasn’t certain whether the US is in a recession or not, it didn’t “really make any sense at all” that US economic worries could affect Bitcoin’s price.
He added that it’s “not clear that tariffs are a fundamental bad for Bitcoin”.
Further, he pointed to Bitcoin’s extremely positive price performance, as the number one coin is up 15% from November, when Trump was re-elected.
Obviously, 2024 was pretty incredible, pretty historic. That fundamentally, we think, is what the long term is. That’s why people think of it like digital gold.
BlackRock’s global head of digital assets, Robbie MitchnickThe latest available data for Tuesday, meanwhile, shows that the firm’s iShares IBIT spot Bitcoin ETF did extremely well, raking in US$218.1 million (AU$344 million), while other US Bitcoin ETFs remained flat.
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