Opinion: The Federal Reserve's shrinking balance sheet will slow down or increase liquidity, which will benefit risky assets such as cryptocurrencies
Internet reports that Bitcoin rebounded from below US$83000 and briefly exceeded US$88000 after the Federal Reserve announced a slowdown in its balance sheet contraction. Shubh Varma, CEO of crypto research platform Hyblock Capital, pointed out that slowing down the balance sheet contraction or increasing liquidity will benefit risky assets such as cryptocurrencies. However, concerns about the uncertainty of Trump's tariff policy have been suppressing the stock market and cryptocurrencies. Some analysts believe that technically, BTC or a drop of US$70,000 can restart the upward trend. According to the Federal Reserve Observation Tool on the Chicago Mercantile Exchange, federal funds futures prices reflect an 89.1% chance that the Federal Reserve will cut interest rates at least twice this year.
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