Will A Fed Pivot Rekindle The Bitcoin Bull Run? If Yes, Expect A ‘Shift In Institutional Sentiment,’ Experts Say
A potential dovish shift by the Federal Reserve, driven by disinflationary pressures stemming from President Donald Trump‘s tariff policies, could markedly reshape institutional investor sentiment toward cryptocurrencies in the coming quarters.
What Happened: As global trade tensions escalate and economic indicators signal a complex interplay of inflationary and disinflationary forces, the crypto market stands at a pivotal juncture, with Bitcoin (CRYPTO: BTC) and stablecoins poised to benefit from evolving monetary policies and shifting investor priorities.
The U.S. economic landscape has been under strain since Trump’s administration introduced tariffs, including a recent 125% tariff retaliation from China, which has disrupted global supply chains and heightened market uncertainty.
Despite this, the crypto market has shown resilience, with Bitcoin maintaining relative stability.
What Experts Are Saying: Ruslan Lienkha, chief of markets at YouHodler, explains that a dovish Fed, characterized by lower interest rates and a more accommodative monetary policy, could catalyze a surge in crypto investments.
“A dovish Federal Reserve… would likely lead to increased capital inflows into risk assets, including cryptocurrencies,” Lienkha states, emphasizing that such a policy shift creates a risk-on environment where institutional investors seek higher returns in a low-yield landscape.
Eneko Knorr, CEO of Stabolut, reinforces this view, noting, “A dovish Fed stance amid disinflation could spark renewed institutional interest in cryptocurrencies,” as traditional assets like bonds become less appealing, driving investors toward digital assets for growth and diversification.
Tim Delhaes, CEO of Grindery, adds that this shift “could shift institutional sentiment toward crypto, especially as an alternative to low-yield assets,” highlighting the appeal of cryptocurrencies in a looser monetary environment.
Also Read: Trump Signs Landmark Crypto Law, Repeals Biden-Era IRS Rule Targeting DeFi Platforms
The potential for disinflation arises from the broader economic fallout of Trump’s tariffs, which have sparked debates over their inflationary versus disinflationary impacts. …
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