Introduction
The Federal Reserve, led by Chair Jerome Powell, is widely expected to cut interest rates in September 2024. Combined with Trump's proposed tax cuts, this creates a pivotal moment for Bitcoin. Will this unleash a bull run or trigger volatility?
Why the Fed is Cutting Rates šµ
- Inflation Cooling: CPI data shows progress toward 2% target
- Economic Slowdown: Weak jobs + GDP signals demand stimulus
- Market Pressure: Wall Street pricing in cuts (65% chance for Sept)
- Political Pressure: Trump pushing for lower rates to boost economy
Trump's Tax Factor
- Proposed tax cuts could:
- Stimulate economic growth
- Help control inflation through productivity
- Give Fed more flexibility for aggressive cuts
Bitcoin's Bull Case
1. Liquidity Floodgates Open
- Lower rates + tax cuts = more money for risk assets
- 2020 precedent: Near-zero rates sparked 600% BTC surge
2. Weaker Dollar Effect
- Rate cuts typically weaken USD
- Makes BTC more attractive as hedge
3. Institutional FOMO
- Spot Bitcoin ETFs could see record inflows
The Bear Risks
- "Sell the News" Effect
- Recession fears may override liquidity
- Stocks could temporarily steal capital
- Election uncertainty volatility
What to Watch
- Powell's Jackson Hole Speech (Aug 23)
- August Jobs Report (Sept 6)
- BTC ETF flows
- Trump's tax policy progress
Strategic Takeaways
- Short-term: Expect volatility (dip-buying opportunities)
- Long-term: Bullish with cuts + tax reforms
- $100K+ cycle becomes more likely
Bottom Line:
The Fed's cut combined with potential tax changes could be rocket fuel for Bitcoin - but expect turbulence along the way.
Agree? Comment your $BTC price target below Click on the BTC Chart and Book your profits wisely !
