BlackRock issues stern warning to Fed as crypto industry suddenly braces for predicted 50 percent Bitcoin price crash

Update as of September 11 below. This post was originally published on September 10.

Bitcoin
Bitcoin
has recovered from a price slump last week and is rising along with stock markets as traders hold their breath waiting for a bombshell from the Federal Reserve.

Subscribe now Forbes' CryptoAsset and Blockchain Advisor and “discover blockchain blockbusters that can generate gains of over 1,000% after the Bitcoin halving earthquake”!

The Bitcoin price has risen back to $60,000 per Bitcoin after falling to $50,000 due to “extreme fear” that gripped the market.

As traders now look for signs that the market could be heading for a recovery, analysts at the world's largest asset manager and issuer of Bitcoin spot ETFs (exchange-traded funds) BlackRock warned that they expect further “bouts of volatility” and predicted that the Fed will not cut interest rates as quickly as markets expect.

Register now for free CryptoCodex—A daily five-minute newsletter for traders, investors and crypto curious people to keep you informed and up to date with the bull run in the Bitcoin and crypto market

Forbes‘Fasten your seatbelts’ – Warning of a serious $40,000 Bitcoin price crash as Fed suddenly prepares for a US dollar ‘crisis’ that could trigger a ‘total collapse’From Billy Bambrough

“We see several factors driving market volatility: resurgent recession fears due to weaker economic data, U.S. election jitters, and profit-taking as investors make room for new equity issuance,” BlackRock Investment Institute strategists led by Jean Boivin wrote in a note, adding: “We do not expect the Federal Reserve to cut interest rates as much as markets expect.”

Bitcoin price rose sharply yesterday along with the stock market as traders await more inflation data this week, which will likely prompt the Federal Reserve to cut interest rates by either 25 or 50 basis points next week.

The Fed is widely expected to cut interest rates at its two-day meeting on September 17, its first rate cut since the pandemic and one that could usher in a new cycle of cheaper credit and fresh liquidity.

Last week, a weaker-than-expected US jobs report triggered a crash in the price of Bitcoin. The weakening labor market fueled fears that the US Federal Reserve waited too long to cut interest rates and could have pushed the economy into recession.

“Even if inflation is moving toward the Fed's target in the near term, we think higher inflation over the medium term will limit the Fed's ability to cut rates,” Boivin wrote. “Growth fears and easing inflation have pushed 10-year yields to 15-month lows as investors have priced in cuts of more than 100 basis points by year-end and about 240 basis points over the next 12 months — implying a Fed response to a recession.”

Register now for CryptoCodex—A free, daily newsletter for crypto-curious people

Forbes$36 trillion ‘by the end of 2024’ – Elon Musk backs serious warning of US dollar inflation expected to cause ‘inevitable’ Bitcoin price crashFrom Billy Bambrough

Meanwhile, analysts at broker Bernstein warned that the Bitcoin price could collapse by almost 50% to around $30,000 if Vice President and Democratic Party candidate for 2024 Kamala Harris wins the US presidential election in November.

However, they also believe that a victory for former US President and Republican candidate Donald Trump could see the price of Bitcoin rise to $90,000 thanks to Trump's recent commitment to the technology.

Update 9/11: Cryptocurrencies remained a looming specter during the presidential debate between Donald Trump and Kamala Harris and were not mentioned, even though the cryptocurrency industry has spent $119 million on the election so far.

Almost all of the donations came through large political action committees, with the Fairshake PAC accounting for the largest share, according to the August report from consumer advocacy group Public Citizen.

Trump is widely seen as a crypto candidate after the former president championed Bitcoin and cryptocurrencies this year, putting him at odds with Harris, who is expected to continue the Biden administration's hostile stance toward cryptocurrencies despite her recent overtures and peace offerings to the crypto world.

A large majority of US cryptocurrency owners (73%) told According to a survey by Gemini, they will consider a candidate’s policies on digital assets when voting in the U.S. presidential election this year.

According to the forecasting platform Polymarket, the debate has led to more equal opportunities between the two candidates and now sees both Harris and Trump at 49 percent.

“The market assumed that Kamala Harris had won the debate, especially in the early stages, which led to a small downward move in cryptocurrencies,” said Caroline Mauron, co-founder of Orbit Markets, a liquidity provider for trading digital asset derivatives. told Bloomberg.

“After the last three years of regulatory purge, a positive crypto regulatory policy can reignite innovation and bring users back to financial products on the blockchain,” wrote analysts led by Gautam Chhugani in a note published by Coindeskadding: “Elections remain difficult to predict, but if you're long cryptocurrencies here, you're probably making a Trump deal.”

The cryptocurrency-based prediction platform Polymarket currently favors Trump's return to the White House; 52% of users are betting on his victory.

“Broader factors such as changes in Federal Reserve monetary policy or ETF flows will continue to influence market sentiment ahead of the election,” wrote Yongjin Kim, CEO of crypto trading platform Flipster, in an emailed comment.