Monetary Policy

If the Federal Reserve cuts interest rates early, the US dollar could decline by 10%, which would benefit digital assets like Bitcoin. Analysts believe that a weakening dollar is inversely correlated with Bitcoin prices, but caution is advised when analyzing investment risks and market changes.

The IMF warns that stablecoins may disrupt global payments and weaken local currencies in inflationary economies. While offering benefits like faster cross-border payments, risks include lack of regulation and potential for illicit activity. Regulatory clarity is essential for stability.

ChainCatcher News, according to Jinshi reports, Bank of America CEO Moynihan stated that interest rates will continue to decline, which is very favorable for the market.

BlockBeats News, February 10 — Bank of America Global Research states that the Bank of Japan is expected to raise interest rates by 25 basis points in April, earlier than the previously expected June; it is also expected that the Bank of Japan will raise interest rates by another 25 basis points in September 2026, followed by two more increases of 25 basis points each in January and July 2027. (Jin10)

White House Chief Kevin Hassett states that future employment may decline due to slower labor force growth and increased productivity. From November to December, the average non-farm payroll increase was 53,000 per month, far below the pre-pandemic average of 183,000. He emphasizes that the economy is not weak, and tighter immigration combined with rising productivity allows growth even with limited labor force. The January forecast is an increase of 70,000. Powell says that demand and supply are declining simultaneously, making it very difficult to interpret at present.

Federal Reserve Board Governor Christopher Waller stated on February 9 that recent sharp fluctuations in Bitcoin indicate that the TACO trading frenzy that occurred when the Trump administration took office has subsided. Bitcoin fell to $60,000 on February 5, nearly erasing the gains since Trump's election. Waller pointed out that the surge in volatility is driven by regulatory uncertainty and institutional risk management, with companies entering through ETFs being forced to close positions.

Research firm Bernstein maintains its Bitcoin forecast of $150,000 by the end of 2026, stating that the current dip is the least threatening downturn in trading history. The analyst team pointed out that recent weakness stems from a shift in market sentiment rather than a fundamental collapse, and this sell-off has not seen leverage crashes, exchange failures, or systemic vulnerabilities. Institutional support remains solid, with participation from spot ETFs, corporate finance, and mainstream asset management firms unchanged. Miner debt structures are healthy enough to withstand a prolonged downturn.

Bitcoin reported $70,000 on February 10, and remains in a sluggish trend. Long-term holders' net positions decreased by 245,000 BTC, but the total supply increased from 13.63 million to 13.81 million, indicating reallocation. On February 6, 66,940 BTC flowed into accumulated addresses, reaching the weekly maximum, indicating whale accumulation. The Sharpe ratio of -10 hits a new low, consistent with the late bear market.

Sanae Takashi's Liberal Democratic Party (LDP) has secured an over two-thirds supermajority in the House of Representatives, marking a historic turning point in Japanese politics. The market bets that Takashi's policies will drive expansionary fiscal measures, leading the yen to weaken against the US dollar to the 157.50 range. The Japanese stock market benefited from policy tailwinds and surged strongly, while the bond market was pressured by expectations of fiscal expansion. This victory not only consolidates Takashi's ruling position but also signals Japan's move toward an economic path characterized by large-scale borrowing to support public spending.

Japanese Prime Minister Sanae Takaichi achieved the biggest post-war victory in the February 8 parliamentary election, with the Liberal Democratic Party expected to secure 274 to 326 seats. The market responded quickly, with the US dollar rising 0.2% against the yen to 157, and Bitcoin surging 5% against the yen. The strong mandate paves the way for crypto tax reforms, with the current top rate of 55% potentially reduced to 20%, along with capital gains tax and allowing loss carryforwards for three years.

Economist and Bitcoin advocate Lyn Alden states that the Federal Reserve is entering gradual money printing, mildly stimulating without large-scale liquidity injections. She recommends holding scarce assets and balancing from optimistic sectors to underweighted ones. Trump nominates hawkish Waugh, with March rate cut expectations dropping to 19.9%. Alden says all policies will ultimately lead to currency depreciation.

Trump nominates Kevin Wash to be Federal Reserve Chair, gold plunges 8.35%, the largest drop in 40 years, and the US dollar index rises over 1%. Wash advocates a contradictory combination of "rate cuts and balance sheet reduction," believing AI is a deflationary force and refusing to be a major buyer of US Treasuries. Nomura and Barclays have serious disagreements over his hawkish and dovish stances.

Tether acquires a 12% stake in Gold.com for \$150 million, strategically expanding the distribution of its gold-backed token XAUT and bridging physical bullion with digital finance. This partnership signals a major push into the booming \$5.5 billion tokenized gold market.

The NASDAQ index experienced its most severe two-day consecutive plunge, Bitcoin crashed close to $70,000, gold slightly rose, and the US dollar recovered its losses. US Treasury Secretary Janet Yellen stated "support for a strong dollar," drawing a red line, indicating that the dollar is no longer a stable asset. This round of pressure overwhelmed crowded trades (gold, Bitcoin), leading to a stampede in assets driven by consensus. However, the 2-year US Treasury yield slightly declined, reducing the likelihood of systemic risk outbreak.

Trump nominates Kevin Wash as Federal Reserve Chair. Wash criticizes long-term tightening policies, and market expectations shift towards easing. CME FedWatch shows a 46% chance of rate cuts at the first meeting. Market confidence rebounds, stocks rise first, followed by cryptocurrencies. Bitcoin reacts strongly to liquidity expectations, and altcoins respond even more quickly.

IMF latest data shows that the proportion of RMB reserves has dropped from 2.83% to 1.93%. USDT in circulation exceeds $305 billion, with transactions reaching $56.7 trillion. Chinese exporters use USDT to evade capital controls, with settlement amounts increasing fivefold. The RMB share in SWIFT has decreased to 2.89%. USDT and Bitcoin are absorbing the demand that Chinese restrictions cannot meet.

Bitcoin welcomes Groundhog Day, as Phil sees a shadow signaling six weeks of winter. Bitcoin briefly dropped to $74,000. Over $2 billion was liquidated over the weekend, and on January 29, ETF outflows reached a record $817.8 million. The actual yield increased to 1.93%, suppressing risk assets. Bitcoin may remain subdued ahead of the March 17-18 FOMC meeting.

U.S. President Trump’s nomination of Kevin Wash as Federal Reserve Chair has sparked market concerns. Analysts point out that his hawkish stance could put pressure on cryptocurrencies like Bitcoin. Wash has previously emphasized maintaining high real interest rates, which could lead to a slow economic recovery and rising unemployment, conflicting with Trump’s expectations for interest rate cuts. The market is uneasy about his policy direction.

Trump announced the Federal Reserve Chair candidate on Friday, with Bloomberg reporting Kevin Wash as the frontrunner. Polymarket odds surged from 30% to 95%, while BlackRock Red fell to 3.4%. Wash is seen as hawkish and will push for tightening. In July, he stated that Bitcoin can provide market discipline to "help policymakers understand right from wrong." The market expects a hawkish appointment, strengthening the US dollar and causing US bond yields to rise.

Bitcoin (BTC) collapsed violently in the short term, temporarily trading at around $84,140 on January 30. Trump declared a national emergency and imposed tariffs on countries that send oil to Cuba, causing risk assets to fall. Trump said that a new Fed chairman will be nominated next week, and interest rates should be 2 to 3 percentage points lower. El Salvador's central bank has put $5,000 in gold in reserves and continues to increase its holdings in Bitcoin.