Bitcoin Surges 20% in Two Weeks, Eyes $110,000 on Fed Policy Shift

Bitcoin has been on a steady rise for the past two weeks, closing at just above $86,000 on March 23. This upward trend, coupled with diminishing concerns over inflation, has set the stage for a potential rally to a new all-time high of $110,000, according to Arthur Hayes, co-founder of BitMEX and chief investment officer of Maelstrom. Hayes believes that the Federal Reserve's shift from quantitative tightening (QT) to quantitative easing (QE) for treasuries, along with the transitory nature of inflation, will drive Bitcoin's price to new heights.

In a March 24 post, Hayes stated, “I bet $BTC hits $110k before it retests $76.5k. Y? The Fed is going from QT to QE for treasuries. And tariffs don’t matter cause of “transitory inflation.” JAYPOW told me so.” He further elaborated that if Bitcoin reaches $110,000, it is likely to continue its upward trajectory without significant retracement until it hits $250,000.

Quantitative tightening involves the Federal Reserve reducing its balance sheet by selling bonds or allowing them to mature without reinvesting the proceeds. In contrast, quantitative easing involves the Fed purchasing bonds to inject money into the economy, lowering interest rates and encouraging spending during challenging financial conditions. Other analysts have noted that while the Fed has slowed down QT, it has not yet fully transitioned to easing. Benjamin Cowen, founder and CEO of IntoTheCryptoVerse, pointed out that QT is not over on April 1st, as the Fed still has $35 billion per month coming off from mortgage-backed securities, having slowed QT from $60 billion per month to $40 billion per month.

Market participants are eagerly awaiting the Fed’s expected pivot to quantitative easing, which has historically been beneficial for Bitcoin’s price. The last period of QE in 2020 resulted in a more than 1,000% surge in Bitcoin’s price, from around $6,000 in March 2020 to a then-record high of $69,000 in November 2021. Analysts believe a similar scenario could be unfolding again, supporting Bitcoin’s rally to $110,000.

Enmanuel Cardozo, a market analyst at a real-world asset tokenization platform, highlighted that Bitcoin’s recovery to above $85,000 after the Federal Open Market Committee (FOMC) meeting was a bullish sign for investor sentiment. He noted that the macroeconomic environment supports a Bitcoin rally to $110,000, citing increased global liquidity and discussions around a US Bitcoin strategic reserve. Cardozo also mentioned that a correction to $76,500 aligns with Bitcoin’s historical volatility, often triggered by profit-taking or unexpected market shifts.

Other analysts share a similar outlook. Ryan Lee, chief analyst at Bitget Research, noted that Bitcoin’s recent close above the 21-day and 200-day moving averages aligns with Hayes’ bullish view. However, Lee cautioned that the $88,000 resistance remains a key hurdle for Bitcoin to overcome.