Bitcoin has lost steam from its recent rally, falling back from an all-time high of $124,000 per bitcoin amid a sudden crisis at the Federal Reserve.
Sign up now for CryptoCodex—A free crypto newsletter that will get you ahead of the market
The bitcoin price is up almost double from this time last year, with bitcoin braced for $20 million to $28 million of daily buying pressure that some think could create the new “Rockefellers or Rothschilds.”
Now, as a surprising celebrity suddenly jumps on the crypto bandwagon, the former chief technology officer at bitcoin and crypto exchange Coinbase has predicted bitcoin will “end the Fed.”
Sign up now for the free CryptoCodex—A daily five-minute newsletter for traders, investors and the crypto-curious that will get you up to date and keep you ahead of the bitcoin and crypto market bull run
ForbesDonald Trump Has A Secret Weapon In His War On The FedBy Billy Bambrough
Jerome Powell, chair of the Federal Reserve, is battling stubborn inflation that’s pushed the bitcoin price higher.
Getty Images
“When bitcoin wins, it ends the Fed,” Balaji Srinivasan, the author of The Network State who left Coinbase in 2019, said during a speech at Bitcoin Asia. “And what does that mean? When bitcoin wins, the Fed loses control.”
Srinivasan, who made headlines with his incorrect $1 million bitcoin price prediction in 2023, said bitcoin’s fixed supply of 21 million will see the Fed’s “gyrating rates” get replaced by “algorithmic” monetary policy government debt continues to surge.
“This is only going to get worse as inflation picks up,” Srinivasan said, referring to the U.S. debt pile that’s ballooned to $37 trillion this year following out-of-control Covid-era spending, feared to be spiralling into a debt “doom loop” as higher interest rates force the government to print money to service the debt.
The Fed and its chair Jerome Powell have been sharply criticised by U.S. president Donald Trump this year, with Powell refusing to cave to Trump’s demands for lower interest rates.
The row between Trump and the Fed has been brewing for years, with accusations of political bias beginning when Powell incorrectly called post-Covid lockdown inflation “transitory,” holding back from increasing interest rates in response to rising prices.
The battle was turbo-charged when Powell surprised markets with a 50 basis point inflation hike in September last year, seen by some as a gift to Trump’s Democratic Party election rival Kamala Harris.
Inflation fears have continued to chip away at confidence in the U.S. dollar, with this month’s Federal Reserve interest rate decision expected to see it cut by 25 basis points.
“Bitcoin is now sitting on major on-chain support and a key technical level—but with this being one of the most pivotal weeks of the year for crypto, the stakes could not be higher,” analysts with 10x Research, led by Markus Thielen, wrote in an emailed note.
On Wednesday the Fed’s Beige Book will give insight into U.S. economic fundamentals while Friday’s August jobs report is expected to show an increase of 75,000, according to a Reuters poll, and will be closely watched for its impact on Federal Reserve officials’ thinking ahead of their September interest rate meeting.
Sign up now for CryptoCodex—A free, daily newsletter for the crypto-curious
The bitcoin price has rocketed to an all-time high of over $124,000 per bitcoin this year, with some bitcoin price predictions forecasting it could climb much higher.
Forbes Digital Assets
“With this week and next packed with critical data that will shape the Fed’s September 17 decision, being positioned correctly now will separate the pros from the amateurs. This is not a week for standing still or being complacent,” 10x Research analysts wrote.
Last month, researchers with crypto-friendly Xapo Bank predicted the so-called “great wealth transfer” that will see $84 trillion passed from older generations to younger people will lead to the creation of new “bitcoin dynasties,” families like the Rockefellers or Rothschilds who build up generational wealth through bitcoin and crypto.
“When bitcoin wins, fiat billionaires get flipped,” Srinivasan said, adding that, “several years ago at Coinbase, we calculated that somewhere between $100,000 and $1 million per bitcoin, half the world’s billionaires” are made up of those that hold bitcoin.
“All wealth becomes crypto, all property becomes cryptography and that means global wealth becomes crypto. And so that’s what we call the billionaire flipping and that’s kind of already underway and you’re going to see that in the next few years.”