Bitcoin FUDs Today: Fed’s Comments, IMF Moves, BlackRock’s Controversy
Fed’s Interest Rate Comment and Powell Dismisses U.S. Bitcoin Holdings
The U.S. Federal Reserve has reduced interest rates by 0.25%, now between 4.25% and 4.5%, marking its third cut of the year, totaling a 1% decrease. Fed projections have adjusted to expect only two rate cuts in 2025 due to persistent inflation, with PCE indices forecasted at 2.4% for 2024 and 2.5% for 2025. Chair Jerome Powell remains optimistic about avoiding a recession, although future cuts will be slower. However, he dismissed the idea of the Fed holding Bitcoin, stating that the Federal Reserve is not permitted to hold Bitcoin and is not seeking a change in the law, impacting investor sentiment about potential U.S. Bitcoin reserves amid discussions surrounding President-elect Trump's proposals.
El Salvador to Sell Chivo Bitcoin Wallet Following $1.4 Billion IMF Deal
According to The Block, El Salvador’s IMF deal includes limiting public-sector Bitcoin purchases, restricting government Bitcoin transactions, phasing out the Chivo wallet, ensuring taxes are paid in USD, and enhancing transparency and digital asset regulation. Private-sector Bitcoin acceptance will become voluntary, deviating from the 2021 Bitcoin Law. Despite these measures, El Salvador will accelerate Bitcoin investments to strengthen strategic reserves, as reported by Reuters. The agreement seeks to reduce cryptocurrency risks while addressing economic challenges. El Salvador aims to secure $1.4 billion from the IMF, with total aid potentially reaching $3.5 billion through additional funding sources.
BlackRock's Bitcoin Ad Sparks Backlash Over Supply Cap Disclaimer
BlackRock's recent advertisement for Bitcoin sparked disappointment among the cryptocurrency community when it included a disclaimer stating that the 21 million supply cap may be changed. This cautionary note, also present in BlackRock's prospectus for its spot Bitcoin ETF, outlines potential risks to investors, including the remote possibility of supply increases due to hard forks or bugs. Despite the historical stability of Bitcoin's supply, BlackRock emphasizes the need for such disclosures as part of responsible investing. Bitcoiners were quick to respond, with Bitcoin Archive stating that “Bitcoin is valuable because we bought it. Not because BlackRock did, or the U.S. government might.”
MicroStrategy May Halt Bitcoin Purchases in January Amid Blackout Rumors
Some rumors stated that MicroStrategy may pause its Bitcoin purchases in January 2025 due to a blackout period related to share or convertible debt issuance, sparking investor concerns. The company currently holds $46.02 billion in Bitcoin, with an unrealized profit of over $18.9 billion. In December, it purchased over $3 billion worth of BTC at prices above $100,000. MicroStrategy's stock price surged 460% year-to-date, positioning it among the top 100 publicly traded firms. Following its inclusion in the NASDAQ 100, it may also qualify for the S&P 500, reflecting its strong commitment to Bitcoin's long-term potential.
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