- Federal Reserve Chair Powell has rejected the idea of implementing quantitative easing, emphasizing a commitment to ongoing quantitative tightening.
- Bitcoin’s dominance in the market may continue unless there is a shift in monetary policy in the second quarter of 2025.
The highly anticipated Federal Reserve meeting, which was expected to provide economic relief, instead dampened market optimism.
Jerome Powell’s Defiant Move
During his testimony on February 11th, Fed Chair Jerome Powell dismissed the possibility of reintroducing Quantitative Easing (QE), stating that such measures are only considered when interest rates are at zero.
He further reiterated the central bank’s dedication to continuing Quantitative Tightening (QT), indicating that any policy adjustment is not on the immediate horizon.
This stance has sparked intense discussions within the crypto community, with some viewing it as a necessary step for economic stability, while others fear it could delay the next significant rally for Bitcoin [BTC].
Community Response
For instance, Macro analyst Alex Krüger posted on X reaffirming Powell’s position and remarked,
“We are far from QE – some people needed to hear this.”
However, when challenged by an X (formerly Twitter) user who pointed out,
“No need for QE, only for discontinuation of QT.”
Krüger replied saying,
“A few more months to go for that.”
Echoing similar sentiments, Felix Jauvin, the host of the On the Margin podcast, added,
“We are entering an economic golden age in my opinion and are less dependent on monetary dominance to keep things together. Again, THIS IS A GOOD THING!”
According to comments, many believe that both the broader financial market and the crypto sector are poised for growth.
However, crypto analyst Kevin offered a contrasting view when he noted,
“We do not need QE, but we have also never witnessed a macro cycle peak in #BTC Dominance while #Altcoins market was relevant during a time of active QT.”
Is Bitcoin’s Bull Run on the Horizon?
Kelvin suggested that historically, Bitcoin’s dominance in the crypto market has never peaked during a period of QT, which occurs when central banks restrict liquidity through asset sales or high interest rates.
Unless there is a change in monetary policy, BTC’s market dominance may continue along its current trajectory.
Analysts anticipate a potential shift in Q2, signifying that macroeconomic factors could impact market trends during this period.
However, if Fed Chair Powell sticks to his current stance of extending QT or maintaining elevated interest rates, expectations of an imminent “altcoin season” may not materialize.
This scenario would challenge predictions of a widespread altcoin surge, reinforcing Bitcoin’s prevailing dominance in the digital asset realm.
Current Market Landscape
This event coincided with Powell’s semi-annual monetary report to the U.S. Congress on February 12th, where he reiterated that the Federal Reserve was “eager to adjust its policy stance.”
Additionally, it aligned with a notable uptrend in the broader crypto market, with the global market capitalization reaching $3.19 trillion, marking a 1.35% increase in the past day.
BTC, the leading cryptocurrency, mirrored this trend, trading at $96,009.53 at the time of writing. Bitcoin recorded a modest gain of 0.04% in the last 24 hours, according to CoinMarketCap.
These figures showcase the market’s resilience amid ongoing macroeconomic uncertainties, reinforcing Bitcoin’s dominance amidst evolving monetary policies.