Bitcoin Could Surge 110% to $200,000 if Fed Cuts Rates 250 Basis Points

Macro investor and fund manager Dan Tapiero has expressed his belief that Bitcoin (BTC) could experience a significant bullish trend if the US economy slows down and the Federal Reserve adjusts its monetary policy accordingly. Tapiero highlighted that the uncertainty caused by tariffs is having a negative impact on economic growth in both the US and China. This economic slowdown could prompt the Federal Reserve to cut interest rates, similar to the recent actions taken by China’s central bank, which could potentially drive Bitcoin to new heights.

Tapiero suggested that if the US economy slows down significantly, the Federal Reserve might be compelled to reduce interest rates by 250 basis points, bringing them down to 1.4%. In such a scenario, Bitcoin could potentially rally to over $200,000, more than doubling from its current level of $97,095. This prediction is based on the idea that lower interest rates and increased liquidity could boost Bitcoin's value as investors seek alternative assets.

Earlier this week, the People’s Bank of China announced a reduction in its policy rate for short-term loans by 10 basis points, from 1.5% to 1.4%. Additionally, the PBOC lowered the reserve requirement ratio by 50 basis points, which is expected to release approximately $138.5 billion in additional liquidity to the market. These measures are aimed at stimulating economic growth and providing more financial flexibility for commercial banks.

Tapiero also noted that consumer expectations regarding the US economy have dropped to levels not seen since the Global Financial Crisis in March 2009. He argued that the corrective measures taken in response to this economic downturn could have a positive impact on Bitcoin. According to Tapiero, the need for lower interest rates and a weaker US dollar to offset fiscal austerity could lead to fiat debasement, which would benefit Bitcoin.