Bitcoin is making headlines once again as it edges closer to the $100,000 mark, surging nearly 30% since hitting lows in April. This powerful rally comes amid growing concerns about the U.S. economy and the future of the dollar, creating what some analysts are calling “the Federal Reserve’s worst nightmare.”

According to insights shared by The Kobeissi Letter, markets are signaling that stagflation — a troubling mix of stagnant economic growth and rising inflation — may already be here. Recent data revealed that U.S. GDP shrank at an annualized rate of 0.3% in the first quarter, dragged down by record-high imports. Meanwhile, the Fed’s preferred inflation measure, the PCE price index, remained flat in March after a 0.4% increase in February, reaching its highest level since mid-2024.

With inflation staying stubbornly high and economic growth slowing, the Federal Reserve is facing a tough decision. While the market expects the Fed to hold rates steady in its upcoming meeting, traders are betting on interest rate cuts starting as early as June. Many believe such monetary easing could send a fresh wave of liquidity into risk assets like Bitcoin.

“Bitcoin stands to benefit significantly if the Fed resumes rate cuts, as lower rates typically drive investors toward alternative stores of value,” said Tracy Jin, COO of crypto exchange MEXC.

This recent bitcoin surge marks a major shift. Earlier this year, bitcoin’s price was weighed down by stock market struggles and global trade tensions. But since former President Trump’s ‘Liberation Day’ announcement, bitcoin has broken away from traditional market patterns, soaring past $90,000 and outperforming major indices like the Nasdaq.

“Bitcoin is showing impressive strength despite the challenges facing traditional markets,” said David Hernandez, a crypto investment expert at 21Shares. “As policy-driven volatility increases, we expect bitcoin to continue decoupling from equities and attract investors seeking a hedge.”

For crypto enthusiasts and investors, this moment is more than just a price rally — it’s a reflection of Bitcoin’s growing role as a safeguard in uncertain economic times.

Published on Binance Square Write to Earn by NoriFtm

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