FOMC Day: Is Bitcoin Going To The Moon Or The Floor?

Table of Contents

Plus: 83% of institutions are going deeper into crypto… are you?

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🏢 Institutions are coming.

🍋 News drops: Director spends Netflix’s money on crypto, Hollywood stars demand copyright protections + more

🍍 Market flavor today

Part of the reason for today’s combo of fear and excitement: traders are waiting to see what the Fed does with interest rates + what Jerome Powell says at 2:30 PM EST.

And, y’know, one funky comment from him could make the entire market go sicko mode.

Now, many expect no changes to interest rates – CME Group’s FedWatch tool is giving that a 99% probability. If that’s the case, Bitcoin might just keep the same sideways path it’s been on.

No surprises there.

But here’s where things could get interesting – the quantitative tightening (QT) program.

Last year, Powell hinted that QT (aka the Fed cutting down its balance sheet) might end in 2025.

If he brings that up today, it could be a sign that the Fed is open to restarting buying debt if needed – which basically means they might start putting more money into the system again.

And when there’s more cash in the system, investors tend to feel richer and are more willing to take risks on assets like Bitcoin.

Oh, and there’s something else: spot Bitcoin ETFs had $209.1M in net inflows yesterday.

That’s a change compared to previous FOMC meetings, where investors dumped BTC ahead of the rate decision.

The takeaway here? A few things:

Some institutional investors might be expecting the Fed to soften its stance;
Others could be hedging against uncertainty, meaning they think Bitcoin is a good bet no matter what Powell says.

So yeah, keep an eye on today’s announcement. But if you miss it, no worries – we’ll break it all down tomorrow.

Now, beyond the Fed drama, something else has been goin’ on under the surface – stablecoin supply has been rising fast since November 2024.

Normally, that could mean more liquidity for the market (= more fuel for prices to go up)… but here’s the weird part: it’s not actually helping investors much.

Why? Because, yes, the total supply is up, but stablecoin reserves on spot exchanges are down. At the same time, reserves on derivatives exchanges are increasing.

This suggests that right now, price action is mostly driven by derivatives trading rather than actual spot buying.

Translation: the market isn’t struggling with a lack of liquidity – it’s struggling with a lack of real buying demand.

And if that doesn’t change, expect more volatility in the short term.

🥝 Memecoin harvest

Somewhere out there, a random memecoin just turned a broke degen into a semi-rich degen 💸

Data as of 05:55 AM EST.

Check out these memecoins and plenty more here.

In times like these, there’s always gotta be someone that delivers our daily dose of hopium.

That “someone” today: EY-Parthenon and Coinbase.

They surveyed decision-makers at 352 companies worldwide and came back with this fun conclusion: crypto’s going mainstream.

Here’s what the survey revealed:

1/ Institutions are getting serious about crypto

83% of surveyed institutional investors plan to increase their crypto holdings in 2025.

That’s cuz they see crypto as the best opportunity for solid returns over the next three years.

Other reasons they’re going in:

Crypto is innovative tech, and they wanna be part of the future;
They see it as a hedge against inflation.

2/ It’s not just BTC and ETH

Turns out, 73% of investors already hold altcoins (most stick to just one or two, tho’).

Top picks? XRP and Solana, followed by Dogecoin and Binance Coin.

3/ Interest in stablecoins

84% of investors are either using or planning to use stablecoins.

And no, it’s not just for buying other cryptos.

Institutions are using stablecoins for generating yield, foreign exchange, internal cash management, and external payments.

4/ DeFi is about to explode

Right now, only 24% of investors engage with DeFi. But in just two years, that’s expected to triple to 75%.

They’re drawn in mainly by derivatives, staking, lending, and cross-border settlements.

5/ Yes, challenges still exist

Even though institutions are generally bullish, there are still some concerns.

The biggest ones? Regulations, volatility, and secure custody.

But here’s the good part: 68% of investors believe that better regulatory clarity will be the next big catalyst for crypto growth.

The takeaway: institutions aren’t just testing the waters anymore – they’re diving into crypto this year.

And when big money starts pouring in… well, you know…

🚀

🍋 News drops

🎬 Film director Carl Erik Rinsch is facing charges after blowing Netflix’s money on everything but his sci-fi series Conquest. The millions he got were used to fund crypto trades, luxury cars, designer clothes, and even his divorce.

🤖 Apptronik got $403M in Series A funding – and ARK Invest was among the backers. This company has built 15 robots, including NASA’s Valkyrie.

✊ 400+ Hollywood stars – including Paul McCartney and Chris Rock – are urging the US government to keep copyright protections strong. They’re not happy about companies like Google and OpenAI wanting to loosen the rules so AI can train on their work.

🧡 Enemies-to-lovers story of the day: Minnesota state Senator Jeremy Miller and Bitcoin. He went from being a skeptic to now pushing the Minnesota Bitcoin Act.

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