"A historically pro-Bitcoin Fed has emerged"...What are the chances of a cryptocurrency bull market?

▲ Bitcoin (BTC), economic indicators, US Federal Reserve (Fed)/ChatGPT generated image

A new wave of anticipation is building in the cryptocurrency industry as the US Federal Reserve (Fed) Board of Governors is reportedly transforming into its most pro-Bitcoin lineup in history.

According to U.Today on May 15 (local time), an analysis suggests that the Fed, the world's most influential central bank, is currently undergoing a leadership transition, and this change could be a boon for Bitcoin (BTC) and other major cryptocurrencies. River, citing past statements from officials, evaluated the current Fed Board of Governors as the most pro-Bitcoin lineup in history.

Kevin Warsh, a former Fed Governor, was categorized as a prominent Bitcoin supporter. He views Bitcoin as a safe-haven asset and has been described as a figure who believes Bitcoin serves as the new gold for generations under 40. Christopher Waller also referred to Bitcoin as "electronic gold," asserting that its primary market function is to serve as a digital alternative to precious metals.

Jerome Powell, the current Fed Chair, is considered a cautious traditionalist but has made relatively favorable remarks about Bitcoin in the past. At the New York Times DealBook Summit, Powell categorized Bitcoin as a speculative asset but compared it to gold, stating that it "is like gold in that it's virtual and digital."

Within the Fed Board, there are also pragmatic individuals like Michelle Bowman, Philip Jefferson, and Lisa Cook, who are cautious about cryptocurrencies but do not outright reject them. Michael Barr, on the other hand, was mentioned as the sole skeptic, having specifically warned last year about the risks that stablecoins could pose.

However, a pro-Bitcoin Fed Board of Governors does not immediately guarantee a cryptocurrency bull run. U.Today reported that recent higher-than-expected inflation indicators have significantly weakened the possibility of short-term interest rate cuts. Investors are pricing in a 60% chance that the Fed's benchmark interest rate will increase by 25 basis points by the Federal Open Market Committee (FOMC) meeting in January next year. As Bitcoin is an asset sensitive to global liquidity, if the Fed shifts back into an interest rate hike mode, it could be a strong bearish factor for the cryptocurrency market.

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