Financial Insights That Matter
QCP Capital has issued a cautious outlook for markets ahead of the Federal Reserve’s final meeting of 2024, citing potential volatility amid decreasing liquidity and technical signals for Bitcoin BTC/USD.
The firm also noted growing optimism for crypto in 2025, fueled in part by speculation surrounding Donald Trump‘s return to office and emerging Bitcoin-related policy proposals, such as a draft Executive Order for a strategic Bitcoin reserve.
What Happened: In its market note on Wednesday, QCP Capital stated that the Fed is widely expected to announce a 25 basis point rate cut during its December meeting while maintaining a hawkish stance.
The firm anticipates the Fed’s final dot plot for the year will signal three rate cuts in 2025 but cautioned that the central bank will remain “non-committal” regarding the pace of cuts next year.
“We anticipate tonight’s statement and dot plot to carry a slightly hawkish tone, reflecting US inflation stabilizing above the Fed’s 2% target and a robust labor market,” QCP Capital wrote.
The firm also warned that thinning liquidity across global markets could amplify price swings, potentially triggering large-scale liquidations.
From a technical standpoint, QCP Capital highlighted Bitcoin’s precarious position, pointing to an “evening star” pattern on the daily chart and bearish divergences as signs of caution.
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Why It Matters: The firm advised against panic, urging traders to “stay the course” despite short-term price drops.
“With 2025 poised to be a potentially bullish year for crypto, particularly with Trump in office, staying the course may prove beneficial,” QCP Capital added.
The bullish sentiment for next year aligns with emerging narratives about Bitcoin’s role in future U.S. economic policy.
The Bitcoin Policy Institute has reportedly drafted a proposed Executive Order, which would establish a strategic Bitcoin reserve (SBR) under Trump’s administration.
The draft outlines plans to consolidate Bitcoin holdings across U.S. federal agencies and position Bitcoin as a key strategic reserve asset, enhancing financial security and fostering economic leadership.
The draft policy emphasizes Bitcoin’s decentralized nature and potential as a “digital gold,” with the proposed SBR managed by the U.S. Treasury Department’s Exchange Stabilization Fund (ESF).
As stated in the document, the initiative aims to “cement American financial dominance long into the future” and expand the diversity of U.S. reserve assets.
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