Crypto Market Braces for Potential 50% Bitcoin Price Decline Following BlackRock’s Fed Warning
Bitcoin has rebounded from a recent price crash, aligning with stock market movements as traders await news from the Federal Reserve. The cryptocurrency’s price has approached $60,000 after dropping to around $50,000 due to market fear. Analysts at BlackRock, the world’s largest asset manager and bitcoin spot ETF issuer, anticipate further volatility and a slower rate cut by the Fed than market expectations.
The recent surge in bitcoin price coincided with stock market gains, with traders eyeing upcoming inflation data that could influence the Fed’s interest rate decision. The Fed is anticipated to cut rates during its September meeting, potentially signaling a new phase of borrowing cost reductions and increased liquidity.
A weaker U.S. job report last week triggered a bitcoin price decline, sparking concerns that delayed rate cuts by the Fed could lead to an economic downturn. BlackRock’s analysts highlighted multiple factors contributing to market volatility, such as recession fears, election uncertainties, and profit-taking activities.
Looking ahead, Bernstein analysts warned of a potential 50% bitcoin price crash to $30,000 if Kamala Harris wins the U.S. presidential election, while a victory for Donald Trump could propel the price to $90,000. The ongoing election dynamics, with Harris and Trump both garnering equal support, have implications for the cryptocurrency market.
The crypto industry’s significant financial involvement in the election, largely through super PACs like Fairshake PAC, underscores the sector’s interest in political outcomes. Trump’s favorable stance on crypto contrasts with Harris’s perceived regulatory approach, shaping market sentiments and investment strategies.
As the election landscape evolves, factors like Federal Reserve policy changes and ETF movements will continue to sway market sentiment. Analysts emphasize the importance of regulatory clarity and favorable policies to drive innovation and user engagement in blockchain-based financial products. The outcome of the election and subsequent policy shifts are poised to impact the crypto market in the coming months.
