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There are various potential threats that could affect the current BTC bull market, one of the significant concerns coming from BlackRock. The company stated that due to the decentralized nature of the BTC protocol, it "cannot guarantee" that the 21 million BTC supply cap will remain unchanged. This statement has sparked discussions, but should be viewed in the relevant context.
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The latest developments, such as Google's announcement of its "Willow" quantum chip with 105 qubits, have once again raised discussions about the potential long-term threat of quantum computing to BTC's security. While this technology is still in its early stages and lacks the scale and stability to directly undermine BTC's cryptographic defenses, the theoretical risk is worth noting.
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Federal Reserve members have recently raised their inflation expectations. This change is more driven by political considerations rather than factors like economic growth or supply bottlenecks, as during the COVID crisis. Specifically, concerns about potential tariffs 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 negligible. This suggests that the Fed's inflation expectations may not be fully aligned with the current economic reality, which could create flexibility in policymaking for the coming year.
Inflation model forecasts suggest that inflation will not be a major issue next year, which may allow the Fed to maintain a dovish stance.
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Based on past experience, BTC bull markets tend to peak when regulatory pressure reaches a critical point. With most of the pending regulatory issues seemingly resolved - as evidenced by the U.S. Securities and Exchange Commission's approval of a BTC spot ETF - the risk of this BTC bull market ending may depend on other factors. While the significant change of abandoning near-zero rates in December 2021 is a major one, the Fed has recently indicated an intention to cut rates for over a year before the first hike in September 2024.
However, as we previously cautioned, if the probability of a Trump victory increases or is confirmed, the Federal Open Market Committee may take a more hawkish stance, both of which have now materialized. This introduces new uncertainties for BTC and the broader crypto market, as the Fed's response to Trump's potential fiscal policies could impact the trajectory of monetary policy.
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Disclaimer: The market has risks, and investments require caution. This article does not constitute investment advice. Digital asset trading may have great risks and instability. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.
