"Bitcoin Drops Amid Fed Uncertainty, DeepSeek's AI Impact Could Boost Crypto's Long-Term Prospects"

Bitcoin's price has dropped by over 1.6% today, as investors await the outcome of the Federal Reserve's meeting, with analysts divided on whether the central bank will maintain current interest rates or signal a potential shift. Despite the short-term market pressures, Standard Chartered's Geoffrey Kendrick believes that the emergence of DeepSeek could unexpectedly benefit Bitcoin in the long run by reducing inflation-related pressures.

Kendrick argues that DeepSeek's impact on AI prices could ultimately lower inflation, which would be beneficial for risk assets like Bitcoin. He suggests that if the Federal Reserve meeting concludes neutrally, Bitcoin may stabilize and potentially recover to levels above $105,000, akin to pre-DeepSeek price points. Kendrick's optimism is shared by other analysts, who anticipate a gradual resurgence in Bitcoin's price driven by growing institutional interest and a potential pivot in risk asset sentiment.

The cryptocurrency market is currently experiencing fluctuations as Bitcoin struggles to regain its footing. The ongoing uncertainty surrounding the Federal Reserve's upcoming policy decisions is weighing heavily on investor sentiment. Analysts are divided, contemplating whether the Federal Open Markets Committee (FOMC) will opt to maintain current interest rates or consider adjustments, particularly as political pressure mounts from figures like President Donald Trump advocating for a reduction.

A significant uptick in institutional interest is anticipated to bolster Bitcoin's market position in the coming months. Kendrick notes that recent regulatory adjustments, such as the removal of accounting rule SAB 121, could pave the way for U.S. institutions to engage more in the digital asset arena. Total net inflows to Bitcoin ETFs have reached an impressive $38 billion over the last year, indicating robust growing interest. Kendrick predicts that the long-only sector, valued at around $40 trillion, will begin to invest more significantly in Bitcoin by 2025, which suggests potential influxes in demand throughout this year.

The prospect of inflation and macroeconomic uncertainty is drawing traditionally cautious investors towards Bitcoin. Currently, only approximately 1% of total Bitcoin ETF value is managed by pension funds, signaling substantial room for growth. Kendrick predicts that the long-only sector, valued at around $40 trillion, will begin to invest more significantly in Bitcoin by 2025, which suggests potential influxes in demand throughout this year.

Despite geopolitical concerns, such as the potential for the Trump