Bitcoin to Gain from US Inflation Surge, Fed Cuts or Not
The US faces inevitable inflationary pressure whether the Federal Reserve cuts interest rates under political pressure or maintains current levels. President Trump’s call for aggressive rate cuts could flood the economy with cheap money, driving core PCE inflation above 4% by 2026, weakening the dollar and spiking Treasury yields. Alternatively, even without rate cuts, tariffs and expansive fiscal policies are poised to push core inflation toward 3.0–3.2%, with 10-year yields rising to around 4.7%. In both scenarios, Bitcoin stands out as a hedge against rising prices and dollar erosion. Rapid monetary easing would trigger a swift Bitcoin rally alongside stocks and gold, while a slower inflation path would support gradual Bitcoin appreciation as a store of value. Traders should watch Fed rate decisions, inflation data and dollar benchmarks. Bitcoin’s role as an inflation hedge makes it a key asset for navigating US macro uncertainty and potential currency devaluation.
Bullish
Regardless of whether the Fed cuts rates or holds them, the consensus is clear: US inflation will rise. In a rapid-cut scenario, negative real rates and dollar weakness create strong tailwinds for Bitcoin, likely triggering immediate price surges. In a slower inflation build, Bitcoin still benefits as a store of value amid steady dollar erosion and rising deficits. Historical precedents—such as Bitcoin’s 2020–22 rally during post-COVID monetary easing—show that aggressive easing boosts crypto markets. Even gradual inflation can gradually shift capital into non-sovereign assets. For traders, rising inflation expectations, declining dollar indices and potential Fed policy shifts all point toward a bullish outlook for Bitcoin in both the short and long term.