Bitcoin News Today: Bitcoin's Dip Sparks Debate Over Fed Impact and Institutional Strategy

Bitcoin has slipped below the $120,000 mark amid ongoing institutional activity and shifting market sentiment ahead of critical policy developments. As of recent trading sessions, the price of the world’s largest cryptocurrency has retreated from its record high of $124,290 set on August 14, with analysts attributing the decline in part to expectations surrounding the Federal Reserve’s policy stance. Bitcoin options pricing has shown bearish positioning across time horizons, while the Coinbase-Binance price spread has moved into discount territory, signaling strong U.S. spot selling [1].

The uncertainty surrounding Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Economic Policy Symposium has led to a sharp drop in the probability of a September rate cut, with futures traders now pricing in a 73% likelihood—down from 92% a week earlier—of a 25-basis-point reduction in the Fed’s target rate [1]. Analysts like Sean Farrell of Fundstrat suggest that a hawkish tone from Powell could blunt the recent upward momentum in crypto, much like it has in equities. However, some market participants view the dip as an opportunity for a “sell the rumor, buy the news” scenario, should the speech fail to disappoint [1].

Despite the near-term volatility, long-term optimism persists among institutional investors and analysts. Bernstein’s digital assets team, for example, has projected that Bitcoin could reach $150,000 to $200,000 within the next 6–12 months, driven by a broader digital assets revolution and regulatory developments under the U.S. administration. This optimism is supported by the recent enactment of the GENIUS Act, which created a federal framework for dollar-backed stablecoins and is seen as a major step toward legitimizing crypto as a financial asset class [3].

However, some signals point to growing risks of a correction. Institutional purchases of Bitcoin, while still robust, have slowed from earlier peaks, and metrics like the mean net asset value (mNAV) have raised concerns about corporate treasury strategies. A significant portion of firms now have mNAV below 1, meaning their market capitalization has fallen below the value of their Bitcoin reserves. This could lead to companies selling Bitcoin to repurchase undervalued shares, adding downward pressure on the price [4].

Retail participation in Bitcoin has also shown signs of cooling. The share of Bitcoin transactions in the $0–$10,000 range has fallen to 0.6%, the lowest since the 2021 bull market peak. This decline in retail activity—historically linked to the later stages of bull cycles—suggests that institutional and long-term holder dynamics are now dominant. As a result, Bitcoin’s short-term price action is increasingly dependent on the balance of institutional inflows and broader macroeconomic developments [5].

With the U.S. regulatory landscape shifting rapidly and global competitors like the EU and China rethinking their digital currency strategies, the path forward for Bitcoin remains closely tied to institutional adoption and policy developments. While the market faces near-term headwinds, the long-term bull case is still supported by ongoing regulatory clarity and the growing acceptance of crypto as a strategic asset.

Source:

[1] Bitcoin Traders Position for Jackson Hole. What Powell's ... (https://www.investopedia.com/bitcoin-traders-position-for-jackson-hole-what-powell-big-speech-could-mean-for-crypto-11795212)

[2] Winklevoss twins drop millions worth of bitcoin into PAC to ... (https://www.foxbusiness.com/politics/winklevoss-twins-drop-millions-worth-bitcoin-pac-help-bolster-trump-admins-pro-crypto-agenda)

[3] Bitcoin could reach $200,000 within 6 months during 'long ... (https://finance.yahoo.com/news/bitcoin-could-reach-200000-within-6-months-during-long-exhausting-crypto-bull-market-173358527.html)

[4] Expert predicts a large-scale bitcoin sell-off (https://forklog.com/en/expert-predicts-a-large-scale-bitcoin-sell-off/)

[5] Bitcoin Retail Transfers Collapse: Lowest Since Bull Market ... (https://www.mitrade.com/insights/news/live-news/article-3-1059726-20250822)