Bitcoin’s Rally Fuelled by Fed’s Liquidity Moves

Bitcoin is poised for a significant surge, with BitMEX co-founder Arthur Hayes predicting that the cryptocurrency will surpass $110,000 before experiencing a pullback to $76,500. Hayes attributes this bullish outlook to the US Federal Reserve’s shift from quantitative tightening (QT) to quantitative easing (QE), which could inject liquidity into the market.

“I bet $BTC hits $110k before it retests $76.5k. Y? The Fed is going from QT to QE for treasuries,” Hayes wrote on X, dismissing concerns over inflation and tariffs as potential market threats.

Analysts Expect Bitcoin Recovery

Markus Thielen, founder of 10X Research, shares a similarly optimistic view. In a report published on 23 March, he suggested that Bitcoin may have already found its local bottom and is set for a recovery. He cites the Fed’s dovish stance on inflation and former US President Donald Trump’s more flexible approach to tariffs as key factors that could boost investor confidence.

“The Fed signalled it might look past short-term inflationary pressures, laying the groundwork for potential future easing,” Thielen stated.

He also pointed to improved market conditions, such as Bitcoin holders’ long-term investment behaviour and strong performance in Bitcoin exchange-traded funds (ETFs), as indicators of resilience.

ETF Inflows Indicate Strength

A surge in inflows to US-based spot Bitcoin ETFs further supports the bullish sentiment. Data from Farside Investors reveals that US-listed spot Bitcoin ETFs collectively recorded net inflows of approximately $744 million last week. BlackRock alone accounted for $537 million in new investments, highlighting growing institutional interest.

Thielen acknowledges that while the market outlook remains strong, Bitcoin lacks a clear immediate catalyst for a parabolic rally.

Bitcoin’s Market Performance

At the time of writing, Bitcoin was trading at around $87,000, reflecting a 3.5% gain over the past 24 hours, according to CoinGecko. The total cryptocurrency market capitalisation has also climbed slightly to $2.9 trillion, signalling renewed investor optimism.