Key Takeaways
- Bitcoin surges amidst economic uncertainty, due to the Fed’s decision to maintain low interest rates.
- BTC’s image as a national trend, with states proposing investments, is expected to be reflected in the charts.
- Analysts predict Bitcoin to reach new ATHs in Q2 2025, citing the embracement by governments.
Bitcoin’s surge to $87.27K today has grown expectations in both short-term traders and long-term hodlers regarding its movement into new all-time highs. Amidst the economic uncertainty, the uptrend is considered a reaction of investors to the Fed’s interest rate pause at a range of 4.25% to 4.5%.
Starting in April 2025, the Fed will slow the decline by reducing Treasury securities redemption from $25 billion to $5 billion and maintaining the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion. This decision can have significant effects on Bitcoin and altcoins, reducing the pressure and increasing the liquidity.
By the end of 2026, the Federal Open Market Committee (FOMC) expects the interest rates to fall to a range of 3.5%, igniting optimism for a sustained uptrend on Bitcoin. While the interest rate cuts helped BTC to surge, blockchain experts warn that the asset is still sensitive to global macroeconomic conditions. Also, the rate cuts will increase inflation in the long run, which could trigger another FUD.
Federal Interest Rate Cuts & US Lawmakers’ Proposals Benefit BTC
Amidst the Federal Reserve’s decision to maintain its benchmark interest rates, North Carolina lawmakers have proposed a bill to allocate up to 10% of state-managed funds into Bitcoin investments. Also, Minnesota State Senator Jeremy Miller has introduced the Minnesota Bitcoin Act that allows the state to invest in the asset. The plans of US states for economic diversification and financial inclusion can potentially increase engagement and innovation.
Beyond North Carolina and Minnesota, at least 23 other states plan to propose similar legislation, creating a national trend on Bitcoin followed by the exposure given by Donald Trump. However, oppositions are pointing to the high volatility of the crypto market and the concern over cyber security. The safety-driven paranoia was ignited by the recent Bybit hack, the biggest loot in history.
Crypto Analysts Predict Bitcoin Could Reach ATH In Q2 2025
The embracement of BTC by the U.S. States and the clarity regarding regulatory framework, with the interest rate cuts, have increased the hopes regarding an immediate bull run to a new all-time high (ATH) for BTC. The reputed Wall Street strategist with over 25 years of experience in equity research, Mr. Tom Lee, points out that Bitcoin will become the top-performing asset of the year.
CoinShares asset management firm’s head James Butterfill predicts that Bitcoin has the chance to reach $150,000 in Q2 2025. He also added that it would not be unreasonable to forecast BTC reaching $250,000 soon. Other important predictions for Q2 2025 include $160,000, $185,000, and $200,000. However, various other predictions suggest a reversal to $65K.
Also read: All About Strategic Bitcoin Reserve And National Digital Asset
Bitcoin’s Current Market Scenario
Bitcoin is now 21% down from its previous all-time high of $109,114.88, which it attained two months ago. It now trades around $85,165.15, a 2.51% increase from the past week.
- Fear & Greed Index: 49 (Neutral)
- Market Sentiment: Bearish
- Supply Inflation: 0.88% (Low)
- Dominance: 60.33%
- Volatility: 6.13% (High)