The market has digested the relatively tight interest rate policy; favorable policies may drive BTC stronger
Zach Pandl, head of research at Grayscale, recently stated in an interview that despite January's U.S. job growth falling short of expectations, Bitcoin could still reach an all-time high in the first quarter of 2025.
Weak employment data reduces the probability of short-term interest rate cuts by the Federal Reserve
On February 7, U.S. officials announced that 143,000 jobs were added to the economy in January, below market expectations. This data reinforces market expectations that the Federal Reserve will keep interest rates unchanged, but it will not trigger significant repricing.
The market reacted quickly, with BTC briefly soaring to $100,000 on the same day. Both the stock market and the crypto market rose, reflecting optimism about a slowdown in the Federal Reserve's tightening policy.
However, the CME FedWatch tool shows that the probability of the Federal Reserve cutting rates by 0.25% in March has decreased from 14.5% to 8.5%, indicating that the market remains cautious about short-term rate cuts.
Policy: Progress in stablecoin legislation may boost BTC
Pandl also mentioned that Bitcoin and digital assets are benefiting from multiple favorable policies, especially the advancement of stablecoin legislation.
On February 7, two U.S. Congress members released a draft bill to discuss establishing a regulatory framework for dollar-pegged stablecoins. The bill includes:
Suspension of issuing 'endogenous collateral stablecoins' for two years (i.e., banning stablecoins from being collateralized by their own issued digital assets). Requires the Treasury to promote research on stablecoins.
Market Outlook: BTC is still expected to reach new highs
Pandl believes that as long as the overall stock market remains stable, Bitcoin is likely to set new highs later this quarter.
Although employment data fell short of expectations, it did not shake BTC's upward trend. The focus of the market remains on favorable policies and institutional capital inflows; short-term fluctuations do not affect long-term logic.
Looking back at the bull market of 2021, do you think BTC can go further this time? Let's discuss in the comments!
