The Federal Reserve of the United States anticipates an increase in money circulation, enhancing investor confidence. This expectation follows a significant decline in Reverse Repo transactions. Experts indicate that further drops in Reverse Repo could lead the Fed to enhance its money supply.
Monitoring the Decline in Reverse Repo Transactions
The Federal Reserve is closely observing Reverse Repo transactions that have fallen below $100 billion. A notable reduction of $65 billion within two days has garnered attention. Any decline in Reverse Repo is critical as it reflects the money supply in the economy. Increased liquidity could foster confidence, prompting investors to redirect funds into riskier assets like cryptocurrencies.
Rising Yields in Long-term U.S. Debt
Yields on long-term U.S. debt are around 5%, prompting many countries, including Britain, to reassess their investment policies. The rising yields on long-term U.S. debt may deter risky investments globally, possibly reducing the funds allocated to such investment portfolios.
As investor risk appetite increases, a funding influx into Bitcoin 
$104,585 is anticipated. With expectations that the Fed will continue its money supply practices, analysts predict further price increases for Bitcoin.
Arthur Hayes forecasts that the U.S. Treasury will inject liquidity into the market by spending funds instead of borrowing.
Bitcoin’s price has surpassed the $102,000 mark, currently trading at $101,634. It has shown an 8% weekly increase and a 140% annual rise. There has been a 0.71% increase in 24-hour trading volume and a 1.84% rise in open interest.
Additionally, the ongoing rally in Bitcoin has exceeded most price predictions, reaching peaks above $100,000. The second entry of spot Bitcoin ETFs indicates rising investor interest, with a net inflow of $626.1 million into Bitcoin ETFs led by BlackRock’s IBIT.
There are expectations that Donald Trump will reshape cryptocurrency regulations, potentially making investments more favorable and investor-friendly.
The Fed’s expectations regarding money creation and the decline in Reverse Repo transactions could contribute to Bitcoin’s price appreciation. High liquidity and changes in interest rates may impact investments in digital assets. Bitcoin’s current surge reflects a growing interest among investors in digital currencies.
