Matrixport: Inflation will not be a major issue next year, multiple potential threats may disrupt the current Bitcoin bull market
ChainCatcher news, Matrixport's weekly report shows that there are multiple potential threats that could undermine the current Bitcoin bull market. One significant concern comes from BlackRock, which stated that due to the decentralized nature of the Bitcoin protocol, it is "impossible to guarantee" that the supply cap of 21 million Bitcoins will remain unchanged. Additionally, new developments such as Google's announcement of its "Willow" quantum chip with 105 qubits have sparked discussions about potential long-term threats to Bitcoin's security.
Federal Reserve members have recently raised their inflation expectations. This change is more driven by political considerations. Specifically, concerns about potential tariffs imposed by Trump (which economists generally believe to be inflationary) seem to have influenced their expectations. However, during Trump's first term, the impact of these tariffs on inflation was minimal. This suggests that the Fed's inflation expectations may not fully align with current economic realities, potentially creating room for flexibility in policy-making in the coming year.
According to Matrixport's model, inflation is not expected to be a major issue next year, which may allow the Fed to maintain a dovish stance. However, based on past experience, Bitcoin bull markets often peak when regulatory pressures reach a critical point. As most regulatory uncertainties seem to be resolved, the risk of this Bitcoin bull market ending may depend on other factors.
While the abandonment of near-zero interest rates in December 2021 was a significant change, recently, the Fed has indicated more than a year of intent to cut rates before implementing the first rate cut in September 2024. This situation introduces new uncertainties for Bitcoin and the broader crypto market, as the Fed's response to Trump's potential fiscal policies could influence the trajectory of monetary policy.
