Bitcoin's Bull Run Could Be Powered by Fed Easing, Not Just Speculation

Bitcoin’s price outlook has become increasingly tied to the trajectory of U.S. monetary policy, with weak labor market data in August 2025 potentially signaling the start of a new bull cycle for the cryptocurrency. The latest non-farm payrolls report showed a mere 22,000 jobs added, far below the expected 75,000, and pushed unemployment to 4.3%, the highest since 2021. Analysts argue that these figures, alongside soft labor force participation rates, confirm a cooling labor market and could force the Federal Reserve into a more dovish stance. The Fed's dual mandate—price stability and maximum employment—is now under pressure as inflation cools toward its 2% target, increasing the likelihood of multiple rate cuts in 2025.

The market has already priced in a near-certain 25 basis point cut in September, with a 75% probability of at least three cuts over the rest of the year. Traders and investors are closely watching these developments, as rate reductions typically expand liquidity and lower the cost of capital, which historically has been a strong tailwind for Bitcoin and other digital assets. Analysts like Kanny Lee from SecondSwap highlight that crypto markets tend to react more acutely to liquidity shifts than traditional assets, amplifying the potential impact of the Fed’s policy pivot.

Bitcoin’s price has remained resilient, trading near $112,700 as of September 8, 2025, with a 1.4% 24-hour gain. On-chain metrics further support a constructive outlook, as stablecoin inflows hit $2 billion and Bitcoin open interest climbed above $38.9 billion. These data points suggest a buildup of liquidity and leveraged positioning ahead of the upcoming jobs report and subsequent Fed action. John Murillo of B2BROKER added that a weaker-than-expected jobs report could drive yields lower and push risk-on assets, including crypto, higher. Conversely, stronger job growth might reignite hawkish sentiment and delay easing.

The structural dynamics of this cycle also suggest a more powerful crypto rally than in previous years. Unlike the 2020 liquidity surge, which was largely driven by retail speculation, the 2025 environment features growing institutional participation through ETFs and corporate treasuries. Regulatory clarity is also improving, with the U.S. Securities and Exchange Commission pursuing a more favorable stance toward crypto. These factors, combined with rising global M2 money supply and a broader investor base that now includes pensions and hedge funds, could make this bull run deeper and more sustained.

Some analysts, citing historical patterns, have projected Bitcoin could reach $185,000 by the end of 2025 if the Fed continues its easing path and liquidity expands. The previous easing cycles, such as the 2024 pivot, saw Bitcoin surge from $60,000 to $100,000 in just three months. If this pattern repeats and is amplified by structural changes in market participation, the potential upside for Bitcoin remains compelling.