Fed Data Show They Control Bitcoin

According to data from the Federal Reserve (FED), it appears that they have influence over Bitcoin. Bitcoin has become increasingly complex, but one thing is clear: it has been the best-performing asset over the past years, whether you consider the last two, four, or even ten years. Regardless of your opinion on its future, it is undeniable that Bitcoin is currently the top-performing asset in the world. So, what can we expect next? Will it experience a significant crash, dropping to twelve thousand, fifteen thousand, or even zero? Or will it continue to rise, reaching a hundred thousand or more? It seems that the FED and the overall macroeconomic landscape are now controlling Bitcoin's price action.

Analyze the data to understand how the FED manipulates asset prices, including Bitcoin, and explore what we should watch out for and how valuable Bitcoin could become in the future.

Before we delve into the details, let's start with some basic principles. Price is determined by the equilibrium between supply and demand. If supply exceeds demand, the price goes up, and if demand is lower than supply, the price goes down. This simple concept helps us understand how everything works. Now, let's apply this to the Federal Reserve. When the FED creates more money, it increases demand, resulting in more money chasing the same limited supply. This excess demand drives prices up. Thus, by examining the FED's actions, we can anticipate their impact on asset prices.

The FED has a significant influence on market booms and busts. They control the price of money by manipulating interest rates. By raising rates, they reduce demand and trigger recessions, and by lowering rates, they stimulate the economy. This chart illustrates the history of booms and busts since the establishment of the Federal Reserve in 1913. Before the FED's existence, booms and busts were relatively milder and followed a consistent pattern. However, since the FED's establishment, they have become more frequent and increasingly severe.

To navigate the market successfully, we need to monitor liquidity and interest rates. The FED communicates its intentions in advance, giving us clues about their next moves. Risky assets such as the NASDAQ and Bitcoin are particularly sensitive to FED actions and often signal their plans before the broader market. By paying attention to these indicators, we can anticipate market trends.

Currently, the FED is in a tightening cycle, increasing interest rates at an unprecedented pace. However, they will eventually pivot back to an easing cycle, injecting more liquidity into the system. Our task is to identify when this pivot will occur. Several data points help us gauge the FED's intentions. For instance, the interbank lending risk premium has been soaring, indicating stress in the banking system. The FED aims to reduce inflation and deflate the economy by pushing consumers and businesses into financial hardship. However, they must strike a balance to prevent the collapse of the entire banking system.

Observing delinquencies on debt, consumer conditions, and other market indicators, we can discern that the FED wants to avoid deflationary pressures. They desire controlled inflation rather than a collapse of loans and bankruptcies. Betting markets also reflect the FED's pivot, pricing in rate cuts in the near future.

Now, let's turn our attention to Bitcoin's unique halving cycles. Every four years, the amount of new Bitcoin entering circulation is halved, ensuring a limited supply. This programmed reduction in supply has a significant impact on Bitcoin's price. We are currently in one of these cycles, with the supply decreasing over time. It is important to note that price movements are influenced by this supply reduction.

In conclusion, while the FED's control over Bitcoin and asset prices is evident.