Financial Insights That Matter
Explore our expert analysis here on the SEC’s next move and its implications for XRP’s future.
Bitcoin Struggles Amid Fed Concerns
Meanwhile, bitcoin (BTC) extended its losing streak amid fears of a more hawkish Fed rate path. Fed jitters contributed to BTC’s pullback from the December 17 all-time high of $108,231.
This week, US labor market and services sector data reflected a robust US economy, reducing bets on an H1 2025 Fed rate cut. BTC responded, falling from a January 7 high of $102,668 to a January 9 low of $91.298.
Friday’s US Jobs Report could dictate the Fed’s near-term rate path and BTC’s price trajectory. A pickup in average hourly wages and lower unemployment could delay a Fed rate cut beyond May. A higher-for-longer Fed rate path may impact riskier assets. However, softer wage growth and higher unemployment fuel demand for riskier assets.
US BTC-Spot ETF Market Flows Reflect Uncertain Market Conditions
The US Jobs Report may also influence US BTC-spot ETF market flow trends. On January 8, the US BTC-spot ETF market reported net outflows of $568.8 million, reflecting sentiment toward the Fed rate path. Outflows contributed to BTC’s latest pullback.
Beyond the US economic calendar, news from Capitol Hill may also influence demand for BTC-spot ETFs.
On January 9, Fox Business journalist Eleanor Terrett shared news of the US Senate Banking Committee planning to launch a subcommittee on digital assets, saying,
“The move is seen as a commitment by Banking Committee Chair Tim Scott to prioritize crypto legislation and policy advancement.”
Crypto advocate Senator Cynthia Lummis is reportedly in the running to chair the subcommittee. In 2024, Senator Lummis introduced the Bitcoin Act, proposing the US government acquire one million BTC over five years to address the national debt crisis.
Her appointment may pave the way for a Strategic Bitcoin Reserve (SBR), potentially tilting the supply-demand balance firmly in BTC’s favor. Congress, the Federal Reserve, the Treasury Department, and the President must approve BTC as a strategic reserve asset.
Progress toward an SBR could drive demand for US BTC-spot ETFs and BTC to new highs. Amicus Curiae attorney John E. Deaton recently commented on the potential impact of an SBR on BTC price trends, saying,
“If the U.S. Government (USG) passes Senator Lummis’ Bill and begins buying BTC, it will no doubt cause other nations to follow suit, just like with gold. It could literally create Nation State FOMO, and if that occurs, $1M per BTC happens a lot faster than people think.”
Bitcoin Price Outlook
On Thursday, January 9, BTC declined by 2.53%, following Wednesday’s 1.96% loss to close at $92,710. Significantly, BTC dropped below $92k for the first time since December 30 before steadying.
BTC’s near-term trends depend on the US Jobs Report, BTC-spot ETF market flow trends, and Strategic Bitcoin Reserve (SBR) developments.
Tighter US labor market conditions could temper expectations of an H1 2025 Fed rate cut. A more hawkish Fed may drag BTC below the $90,742 support level. Conversely, higher unemployment and softer wage growth could reignite bets on a March Fed rate, pushing BTC toward its record high of $108,231.
However, progress toward a US SBR could be crucial for BTC to break new ground.
#1a73e8;">Boost Your Financial Knowledge and Achieve Stability
Discover a growing online community dedicated to delivering financial news, tips, and strategies designed to help you manage money effectively, save smarter, and grow your investments with confidence.
#1a73e8;">Top Financial Tips for Saving and Investing
- Personal Finance Management: Master the art of budgeting, expense tracking, and building a strong financial foundation.
- Investment Opportunities: Stay updated on market trends, learn about stocks, and explore secure ways to grow your wealth.
- Expert Money-Saving Advice: Access proven techniques to reduce expenses and maximize your financial potential.