The bitcoin price remains stagnant at approximately $90,000 per bitcoin, having missed the opportunity to rally alongside gold and silver in the past few weeks. As traders speculate on the potential “destruction” of the U.S. dollar by 2026, analysts are sounding the alarm about the dollar’s most significant annual decline since 2017—plummeting nearly 10% against a range of major currencies. This trend is anticipated to continue into next year, driven by expected interest rate cuts from the Federal Reserve, which could lead to an uptick in bitcoin prices. “The Fed is bucking the trend in terms of global central banks … it is still very much in easing mode,” stated James Knightley in an interview.
This week, the latest meeting minutes from the Fed disclosed that policy makers are still divided despite their decision to cut rates. Officials shared a range of perspectives during the December 9-10 meeting, suggesting that interest rates could remain on hold “for some time.” The minutes read “With respect to the extent and timing of additional adjustments to the target range for the federal funds rate, some participants suggested that, under their economic outlooks, it would likely be appropriate to keep the target range unchanged for some time after a lowering of the range at this meeting.” Mark Sobel shared that, “Trump’s erosion of the fundamental pillars of dollar dominance may be a very slow, long-term burn, but it still weighs on participants’ minds,” despite indications of a pause.
The market is currently pricing in an 82% chance that the Fed will keep interest rates unchanged at its late January meeting, according to a source. Polymarket, the prediction platform, is forecasting a 96% chance of an interest rate cut by June. U.S. president Donald Trump indicated this week that he “still might” dismiss Federal Reserve chair Jerome Powell, hinting at the announcement of his successor for “January sometime.” Trump has urged the Federal Reserve to reduce interest rates until 2025, with speculation that Powell may be succeeded by a Trump ally who aligns with his belief that rates should be significantly lower than the existing 3.5%-3.75%.
“Loosening monetary policy is likely around the corner—with bitcoin being a leading beneficiary of cheaper and more abundant dollars,” Timot Lamarre said. “One of the key catalysts for the crypto space in 2026 is interest rate cuts next year,” stated Owen Lau. “Retail will be more excited to get into crypto, institutions will be more excited to get into crypto,” Lau stated during an interview.