Bitcoin News Update: With the Fed Loosening Policy, Optimists Eye $150K Bitcoin as Critics Highlight Vulnerabilities

The Federal Reserve's decision to lower interest rates by 25 basis points at the end of October, setting the federal funds target range at 3.75%-4.00%, sparked significant market swings, with cryptocurrencies experiencing pronounced instability, according to

. This rate adjustment, intended to relax financial conditions, coincided with approximately $550 million in crypto positions being liquidated in the 24 hours leading up to the announcement, including $100 million in leveraged bets on (BTC). Since then, derivatives traders and market analysts have adopted a more guarded approach, with figures such as Killa (@KillaXBT) cautioning that Bitcoin remains confined within a trading range, lingering near $111,000 and struggling to regain upward momentum.

The Federal Reserve's announcement to end its balance sheet reduction—commonly referred to as quantitative tightening (QT)—by December 2025 has further complicated the outlook, as highlighted by

. This policy shift, signaling a move back toward a neutral stance, is anticipated to inject more liquidity into markets, which could be favorable for risk assets like Bitcoin. Nevertheless, Bitcoin ETFs saw $470 million in outflows immediately after the rate cut, reflecting ongoing uncertainty over US-China trade negotiations and broader economic stability, despite the Fed's efforts to loosen policy.

Despite the turbulence, MicroStrategy co-founder Michael Saylor and financial author and crypto proponent Robert Kiyosaki remain optimistic. Saylor, as reported by

, projected that Bitcoin could climb to $150,000 by the close of 2025, citing advancements in regulation, the rise of tokenized securities, and growing institutional participation. Kiyosaki shared a similar perspective, describing Bitcoin's recent decline as a typical mid-cycle correction rather than the start of a longer-term downturn, according to .

On the other hand, critics such as gold advocate Peter Schiff argue that Bitcoin's lackluster performance—despite gold's retreat and a climbing Nasdaq—reveals its weakness as a "safe haven" asset. Schiff's doubts reflect wider market apprehension about Bitcoin's durability in the face of tighter liquidity and evolving Federal Reserve policies.

Mixed signals in the crypto sector have not discouraged institutional involvement. French politician Éric Ciotti has suggested creating a national Bitcoin reserve, aiming to accumulate 2% of the total supply (about 420,000 BTC) over seven to eight years, as noted by

. Meanwhile, California authorities imposed a $675,000 penalty on Bitcoin ATM provider Coinhub for excessive fees and exceeding transaction limits under the state's Digital Financial Assets Law, underscoring the ongoing regulatory scrutiny of crypto operations, as reported by .

The Federal Reserve's plan to resume Treasury purchases in early 2025 is also under the spotlight; analysts believe this could help stabilize bank reserves and relieve market stress, which may indirectly support Bitcoin by enhancing liquidity and boosting investor confidence, as detailed by

.

Adding to the debate, Senator Cynthia Lummis, a close Trump ally, has proposed selling the Federal Reserve's gold reserves to acquire one million bitcoins, presenting it as a way to build a strategic reserve without expanding the deficit, as reported by

. The proposal, which faces significant political and economic obstacles, would theoretically use the Fed's $675 billion in gold (at current valuations) to fund the purchase. While Saylor and Kiyosaki's optimistic projections depend on regulatory progress and economic stability, Lummis's idea highlights the divided opinions on Bitcoin's future in the global financial system.

With US bank reserves nearing their lowest levels since 2020, the debate over Bitcoin's effectiveness as a hedge continues. While institutional investors and policymakers such as Saylor and Lummis advocate for greater adoption, skeptics like Schiff point to the asset's volatility and sensitivity to macroeconomic shifts. As the Federal Reserve's policy changes and regulatory actions reshape the environment, the coming months will reveal whether Bitcoin can establish itself as a reliable store of value or remain a speculative instrument amid ongoing uncertainty.

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