Matrixport Research: A Brief Analysis of Risk Factors in the Current BTC Bull Market

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There are several potential threats that could impact the current BTC bull market, one significant concern comes from BlackRock. The company stated that due to the decentralized nature of the BTC protocol, it "cannot guarantee" that the supply cap of 21 million bitcoins will remain unchanged. This statement has sparked discussions, but it should be viewed in the relevant context.

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Recent developments, such as Google's announcement of its "Willow" quantum chip with 105 qubits, have reignited discussions about the potential long-term threat of quantum computing to BTC security. Although this technology is still in its early stages and lacks the scale and stability to directly undermine BTC's cryptographic defenses, the theoretical risks are worth noting.

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Members of the Federal Reserve have recently raised their inflation expectations. This change is driven more by political considerations rather than factors like economic growth or supply bottlenecks, as seen during the COVID crisis. Specifically, concerns about potential tariffs imposed by Trump—widely regarded by economists as 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.

Inflation models predict that inflation will not be a significant issue next year, which may allow the Fed to maintain a dovish stance.

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Based on past experience, BTC bull markets often peak when regulatory pressures reach a critical point. As most regulatory uncertainties seem to be resolved—with the approval of a BTC spot ETF by the U.S. Securities and Exchange Commission as a marker—the risk of this BTC 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 over a year of intent to lower rates before implementing the first rate cut in September 2024.

However, as we cautioned at the time, if the probability of Trump being elected increases or is confirmed, the Federal Open Market Committee may adopt a more hawkish stance, both of which have now come to fruition. This situation introduces new uncertainties for BTC and the broader crypto market, as the Fed's response to Trump's potential fiscal policies could influence the trajectory of monetary policy.

The above opinions are derived from Matrix on Target. Contact us for the full report on Matrix on Target.

Disclaimer: The market carries risks, and investment should be approached with caution. This article does not constitute investment advice. Trading in digital assets may involve significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions made based on the information provided herein.