China Crypto: Bitcoin Faces Challenges as Investors Await Federal Reserve Decision
China Crypto – Bitcoin’s price has dropped more than 1.6% today, as the cryptocurrency battles to regain its momentum. The largest digital asset has faced challenges amid mixed sentiment from investors, with some expressing concern about the upcoming Federal Reserve (Fed) decision and its potential impact on risk assets like Bitcoin. The Federal Open Markets Committee (FOMC) is meeting today, and analysts are split on whether the Fed will keep interest rates unchanged or lower them, as newly elected President Donald Trump has suggested.
Mixed Analyst Views on the Federal Reserve’s Upcoming Decision
Many analysts and financial institutions expect the Fed to leave rates as they are, but there is also speculation that today’s meeting could surprise markets with a more dovish stance, benefiting risk assets like Bitcoin. According to 10X Research, such a decision would be a “slightly dovish surprise” that could help Bitcoin recover from the market’s reaction to DeepSeek, a new factor that has influenced risk-on assets this week.
DeepSeek’s Impact on Bitcoin
Despite the uncertainty surrounding the Fed’s decision, experts like Geoffrey Kendrick from Standard Chartered remain optimistic about Bitcoin’s recovery. Kendrick asserts that DeepSeek, a new development linked to AI pricing, is unrelated to Bitcoin and in fact, could be beneficial for Bitcoin in the long run. Kendrick argues that since DeepSeek represents lower AI prices, it should help reduce inflation, which would support risk assets like Bitcoin.
Kendrick is confident that Bitcoin will recover from any short-term shocks. He notes, “Risk assets will now wait for the Fed to pass tonight. If it is neutral, I think BTC trades back above $105K, where it was pre-DeepSeek.” As the market watches closely for the outcome of the Fed’s decision, many anticipate that Bitcoin’s price will rebound in the coming days, regardless of the short-term fluctuations caused by DeepSeek.
Bitcoin’s Long-Term Outlook: Institutional Accumulation and Increased Demand
Despite the turbulence caused by market events like DeepSeek, the long-term outlook for Bitcoin remains bullish. Analysts agree that growing institutional interest and accumulation will likely drive Bitcoin’s price upwards in the coming months. Lou Kerner, founder of CryptoMondays, highlighted that while “risk off” events such as DeepSeek can dampen near-term price action, the global appetite for Bitcoin continues to grow. He noted, “The longer-term outlook for Bitcoin is as bullish as ever, as individuals, corporates, TradFi, and governments around the world are all poised for accumulation.”
Increased Institutional Interest in Bitcoin
Kendrick echoes this view, emphasizing that recent developments in the U.S. regulatory landscape are likely to lead to a surge in institutional Bitcoin investments. He pointed out that the removal of the accounting rule SAB 121 last week opens the door for U.S. institutions to more easily enter the digital asset market. Bitcoin ETFs (Exchange-Traded Funds) have already seen $38 billion in net inflows over the past 12 months, signaling strong institutional interest.
Kendrick also observed that pension funds currently hold just 1% of all Bitcoin ETF value, implying considerable potential for growth. With the long-only sector worth $40 trillion in assets, Kendrick believes Bitcoin’s institutional adoption will increase significantly in 2025, further bolstering its price.
Global Crises Could Strengthen Bitcoin’s Position
While there are still geopolitical risks that could affect Bitcoin’s price, some analysts are optimistic that economic or political crises may actually drive further demand for Bitcoin as a safe haven. In times of global uncertainty, Bitcoin is increasingly seen as a better store of value, particularly as its supply remains limited. As Lou Kerner concludes, “BTC price action will continue to benefit from a world in crisis driving demand for a better store of value from everyone everywhere, and a dwindling supply.”
Bitcoin’s Resilience Amid Market Uncertainty
Bitcoin’s price has struggled in the short term, with concerns about the Federal Reserve’s decision and the emergence of DeepSeek affecting market sentiment. However, analysts remain confident that Bitcoin will continue to recover and maintain its long-term growth trajectory. Institutional accumulation, favorable regulatory changes, and a global shift toward digital assets are all factors that will likely contribute to Bitcoin’s resilience. As the Fed’s decision approaches, Bitcoin’s price action in the coming weeks will be closely monitored by investors, with expectations that it will rise once the dust settles.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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