Could the US Federal Reserve’s potential pivot on inflation be the catalyst for a multi-trillion dollar rally in the cryptocurrency market? That’s the bullish prediction from some of Wall Street’s top analysts, as they contemplate a seismic shift in monetary policy.
According to a new report from Forbes, the stage could be set for a remarkable resurgence in the prices of major digital assets like Bitcoin and XRP. The key driver? An estimated $6 trillion in capital set aside could return to the market as the Fed eases its hawkish stance.
The floodgates could open
This is not just a typical crypto rally. Tom Lee, Managing Partner at Fundstrat Global Advisors, believes in the potential for a once-in-a-generation transformative event. If the Fed signals that it has successfully contained inflation, he said people could see trillions of dollars returning to the market within months.
‘Still Early’: Sudden $6 Trillion Fed Inflation Reversal Expected to Trigger Bitcoin, Ethereum, XRP, Crypto Price Boom https://t.co/vYpsbgSq6l pic.twitter.com/doEjvOef58
-Forbes (@Forbes) May 15, 2024
Lee’s bullish outlook centers around the idea that the Fed will soon declare victory in its battle against surging prices. The recent deceleration of the U.S. consumer price index, up 0.3% in April from 0.4% in March, suggests that the central bank’s aggressive rate-raising campaign could its fruits.
If that were the case, Lee believes it could spark an investment frenzy, with Bitcoin up to $150,000, more than double its current price of around $71,000. And if history is to be believed, other cryptocurrencies like XRP could follow a similar trajectory.
Crypto ETFs Provide Tailwind for Institutions
The recent wave of crypto exchange-traded fund (ETF) approvals, which opened the door for traditional investors to gain exposure to digital assets, reinforces this bullish scenario. Since January, a number of Bitcoin and Ethereum ETF were launched, providing a crucial on-ramp to institutional capital.
XRP ready to reappear?
All eyes will be on XRP, the third-largest cryptocurrency by market capitalization, which has struggled to regain its former highs after a lengthy legal battle with the United States Securities and Exchange Commission.
However, if the broader crypto market does indeed embark on a parabolic rally fueled by this $6 trillion in dormant capital, analysts believe that XRP could be one of the biggest beneficiaries. Some are even speculating that the token could surpass the $1 mark – and potentially reach even higher highs – if Bitcoin reaches Lee’s $150,000 target.
XRP has been in the doldrums for a while now, but that could all change in the blink of an eye if this predicted crypto boom materializes. With the SEC issue seemingly resolved, XRP is poised for a major resurgence, and we could see it return to its former glory as one of the best-performing assets on the market.
Featured image from Getty Images, chart from TradingView
