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There are multiple potential threats that could impact the current BTC bull run, with one notable concern coming from BlackRock. The company said that due to the decentralized nature of the BTC protocol, there is "no guarantee" that Bitcoin's 21 million supply cap will remain unchanged. This statement has sparked discussion, but should be viewed in context.
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Recent developments, such as Google’s announcement of its 105-qubit “Willow” quantum chip, have once again sparked discussions about the potential long-term threat of quantum computing to BTC security. While the technology is still in its early stages and lacks the scale and stability to directly undermine BTC’s cryptographic defenses, the theoretical risks are worth paying attention to.
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Federal Reserve members have recently raised their inflation expectations. This change is driven more by political considerations than by economic growth or supply bottlenecks, as was the case during the COVID crisis. Specifically, concerns over potential tariffs imposed by Trump—deemed inflationary by economists—seem to have influenced their expectations. However, during Trump's first term, these tariffs had a negligible impact on inflation. This suggests that the Fed's inflation expectations may not fully align with current economic realities, potentially creating room for flexibility in policy-making in the coming year.
Inflation models predict that inflation will not be a major issue next year, which may allow the Fed to maintain a dovish stance.
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Based on past experience, BTC bull markets often peak when regulatory pressures reach a critical point. As most regulatory issues appear to be resolved—marked by the U.S. Securities and Exchange Commission's approval of a BTC spot ETF—the risk of this BTC bull market ending may depend on other factors. While the abandonment of near-zero interest rates in December 2021 was a significant change, recently, the Fed has indicated an intention to cut rates for over a year before implementing its first rate cut in September 2024.
However, as we warned at the time, if the probability of Trump being elected increases or is confirmed, the Federal Open Market Committee may adopt a more hawkish stance, which has indeed come to fruition. This situation introduces new uncertainties for BTC and the broader crypto market, as the Fed's response to Trump's potential fiscal policies may influence the trajectory of monetary policy.
The above views are derived from Matrix on Target. Contact us for the complete report on Matrix on Target.
Disclaimer: Markets are risky; invest with caution. This article does not constitute investment advice. Trading digital assets can involve significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consulting financial professionals. Matrixport is not responsible for any investment decisions made based on this content.
