Bitcoin Surges 20% to $87,800 Amid Fed Policy Shifts and Corporate Buying

Bitcoin's price movements this week were influenced by several key events, including the Federal Reserve meeting and the Trump administration's evolving cryptocurrency policy. Despite growing recession fears, Bitcoin showed resilience, recovering above $87,800. Corporate investors continued to accumulate the cryptocurrency, and the stablecoin industry surpassed the $230 billion mark in capitalization. Experts' opinions on the market's prospects varied, with forecasts ranging from a prolonged correction to a potential rise to $200,000 in the next two years.

Prior to the Federal Open Market Committee (FOMC) meeting, a trader opened a significant short position on 4,442 bitcoins with 40x leverage, totaling over $368 million. The liquidation point was set at $85,592. Despite community efforts to counter this strategy, the trader managed to close the position with a profit of $9.46 million, converting part of the profit into 3,200 Ethereum worth $6.1 million. Analyst firm QCP Capital noted that this event reflected a persistent negative attitude towards risk, as indicated by the cryptocurrency market's Fear and Greed Index at 32% ("fear").

Amid growing fears of a US recession, Bitcoin is increasingly seen as an alternative macro hedge. Treasury Secretary Scott Bessent acknowledged that a recession cannot be ruled out, a view previously expressed by Donald Trump. BlackRock's head of digital assets, Robbie Mitchnick, emphasized that Bitcoin is likely to thrive in a recession due to increased fiscal spending, deficit accumulation, lower interest rates, and monetary stimulus. However, Coinbase researchers expressed an opposing view, stating that the positive outlook for cryptocurrencies for the first quarter was "clearly misguided" due to recession fears and recently imposed tariffs.

The Federal Reserve's decision to keep interest rates unchanged but confirm plans for two rate cuts before the end of 2025 was a key driver of market movement. The Fed's decision to scale back its quantitative tightening program starting in April was interpreted as an indirect rate cut, reinforcing expectations of monetary easing as early as June. Former CEO of cryptocurrency exchange BitMEX, Arthur Hayes, noted that a true bull run would require either a loosening of bank reserve ratios or a restart of quantitative easing.

The Trump administration continues to shape a new cryptocurrency policy, with President Donald Trump reaffirming his intention to make the US the "cryptocurrency capital of the world." He praised the role of stablecoins in expanding the dominance of the US dollar. Bo Hines, executive director of the President's Council of Advisors on Digital Assets, stated that the federal government is considering budget-neutral ways to acquire Bitcoin, such as realizing profits from gold certificates. Minnesota Senator Jeremy Miller introduced the "Bitcoin Act," which provides the ability for public employees to include Bitcoin in retirement accounts, pay taxes and fees with Bitcoin, and exempt investment gains from state income tax.

The stablecoin market continues to grow, exceeding $230 billion thanks to institutional interest. Tether's USDT dominates with a 62.6% share, reaching nearly $144 billion, followed by Circle's USDC with a market capitalization of $59 billion. Ethereum remains the primary blockchain for stablecoin transactions, holding $35 billion in USDC and $67 billion in USDT. Stablecoin volume on the blockchain has maintained impressive momentum, totaling roughly $800 billion per month over the past four months. USDC and USDT account for $740 billion of the total $850 billion volume for February. Tether CEO Paolo Ardoino stated that conducting a full audit of USDT is a "top priority" for the company.

The global regulatory space is trending toward a softer stance on cryptocurrencies. The U.S. Treasury Department excluded mixer Tornado Cash from the blacklist following a January ruling by a U.S. appeals court that found the sanctions illegal. The Australian government presented a plan to regulate cryptocurrencies that would subject exchanges to existing financial services laws. Pakistan has dramatically changed its stance on cryptocurrencies, proposing to use the country's excess energy to mine Bitcoin. In Russia, the approach to regulation remains more conservative, with the Bank of Russia proposing to ban the use of cryptocurrencies for settlements between Russian residents but allowing investment in cryptocurrencies for "especially qualified" investors.

Despite market fluctuations, corporate hoarders continue to increase their Bitcoin holdings. The number of publicly traded companies buying and holding Bitcoin has increased to 80 in 2025, up 142% from 33 companies in 2023. Japanese company Metaplanet purchased another 150 bitcoins worth $12.5 million, increasing its cryptocurrency reserves to 3,200 coins. The company also issued 2 billion yen (about $13.3 million) worth of bonds to continue buying up the cryptocurrency. Metaplanet plans to own 10,000 bitcoins by the end of 2025 and 21,000 coins by the end of 2026. US President Donald Trump's son Eric Trump joined Metaplanet's strategic board of directors, further emphasizing the rapprochement between the Trump family and the crypto industry. Strategy (formerly MicroStrategy) made the smallest Bitcoin purchase in the history of observation - 130 bitcoins for $10.7 million. With this acquisition, Strategy and its subsidiaries now own 499,226 bitcoins.

Experts' opinions on the future of Bitcoin are divided. CryptoQuant founder and CEO Ki Young Ju predicts up to 12 months of "bearish or sideways price movement," stating that "Bitcoin's bull cycle is over." According to him, all of Bitcoin's onchain metrics point to a bear market. An opposing view was expressed by Bitget CEO Gracy Chen, stating that Bitcoin could cross the $200,000 mark within the next 1-2 years. In her opinion, Bitcoin will not fall below $70,000, rather $73-78,000, which is a good entry point for hesitant investors. Financial expert Timothy Peterson presented an analysis according to which Bitcoin has a good chance of setting a new all-time high by June this year. According to his predictions, BTC/USD has about two and a half months left to surpass the current record of $108,000. Peterson set a median target of $126,000 with a June 1 deadline.