The price of Bitcoin has declined by more than 1.6% today, with the market’s largest cryptocurrency struggling to regain momentum as investors fear tepid news from the Federal Reserve.
Opinion among analysts is mixed as to whether the Federal Open Markets Committee, or FOMC, will keep rates where they are today or lower them, as new President Donald Trump has called for.
While many analysts and financial firms expect rates to remain unchanged, some have suggested that today’s meeting could actually bring “a slightly dovish surprise” for Bitcoin, as 10X Research reasoned in its latest trading note.
Why China's DeepSeek AI Is Blowing Everyone's Minds—And Blowing Up the Market
A Chinese artificial intelligence lab has done more than just build a cheaper AI model—it's exposed the inefficiency of the entire industry's approach. DeepSeek's breakthrough showed how a small team, in an effort to save money, was able to rethink how AI models are built. While tech giants like OpenAI and Anthropic spend several billions of dollars on compute power alone, DeepSeek purportedly achieved similar results for just over $5 million. The company's model matches or beats GPT-4o (OpenAI’...
This may help to blunt the impact that DeepSeek’s emergence has had this week on risk-on assets such as Bitcoin, although Standard Chartered’s Geoffrey Kendrick is expecting the cryptocurrency to recover from this shock regardless.
“DeepSeek has nothing to do with Bitcoin and in fact as DeepSeek means the price of AI is lower, it actually lowers inflation and is good for risk assets (like Bitcoin) which have no-AI presence,” he told Decrypt.
Kendrick expects Bitcoin to continue to rebound in the coming days, although the strength and timing of any return will depend on Jerome Powell and the rest of the FOMC.
“Risk assets will now wait for the Fed to pass tonight,” he adds. “If it is neutral I think BTC trades back above $105k, where it was pre-DeepSeek.”
Irrespective of the Fed’s decision, there’s a general consensus that the coming months will be kind to Bitcoin’s price, driven by growing institutional accumulation.
“While ‘risk off’ events like DeepSix can dampen near term price action, the longer term outlook for bitcoin is as bullish as ever, as individuals, corporates, TradFi, and governments around the world are all poised for accumulation,” said CryptoMondays founder Lou Kerner, while speaking to Decrypt.
This is a view shared by Kendrick, who notes that last week’s removal of accounting rule SAB 121 means that U.S. institutions are now more likely to enter the digital asset market.
SEC Rescinds Controversial Crypto Accounting Rule, Signals Regulatory Shift
On Thursday, the U.S. Securities and Exchange Commission (SEC) rescinded Staff Accounting Bulletin (SAB) No. 121, signaling a shift in its approach to regulating crypto-assets under Commissioner Hester Peirce, who now heads the agency's newly formed crypto task force. Introduced in March 2022, SAB 121 required companies to record a liability and a corresponding asset for crypto assets held on behalf of users. Critics, including Peirce, argued that the guidance added unnecessary complexity and c...
“Total net inflows to the BTC ETFs are now $38 billion (in just over 12 months),” he says.
He also explains that only 1% of all Bitcoin ETF value was held by pension funds as of the end of September, implying considerable potential for growth.
“I expect that long-only sector (which is worth $40 trillion in assets) to properly enter BTC in 2025, meaning flows will be greater this year than [the] last,” he predicts.
Czech Central Bank to Consider $7 Billion Bitcoin Reserve: Report
The head of the Czech central bank is about to make a move that would have been unthinkable just a few years ago—he wants to add Bitcoin to the nation's reserves. Czech National Bank (CNB) Governor Aleš Michl will present a proposal this Thursday that could see up to $7 billion of the country's wealth flow into crypto, potentially making it the first Western central bank to hold digital assets. "For the diversification of our assets, Bitcoin seems good," Michl said in an interview with the Finan...
And while there remains the threat that, at some point, the Trump administration may impose sweeping tariffs on trading partners, some figures are bullish that economic or geopolitical crises may actually strengthen Bitcoin long-term.
As Lou Kerner concludes, “BTC price action will continue to benefit from a world in crisis driving demand for a better store of value from everyone everywhere, and a dwindling supply.”
Edited by Stacy Elliott.
