Following recent volatility in the cryptocurrency markets, a noteworthy assessment has emerged regarding Bitcoin’s future. Sean Farrell, Head of Digital Asset Strategy at Fundstrat, stated th
Following recent volatility in the cryptocurrency markets, a noteworthy assessment has emerged regarding Bitcoin’s future. Sean Farrell, Head of Digital Asset Strategy at Fundstrat, stated that the US Treasury Department’s policies towards the bond market could create a significant bullish environment for Bitcoin. Farrell believes that Bitcoin has passed its bottom and that macroeconomic conditions, particularly towards 2027, could support the cryptocurrency market.
Speaking to Coinage, Farrell stated that the US Treasury Department’s latest quarterly borrowing announcement sent important signals. According to the analyst, the Treasury’s buyback of long-term bonds and shift towards short-term debt instruments could improve liquidity conditions in the market, increasing demand for assets like Bitcoin.
Farrell argued that the bond repurchase strategy previously announced by US Treasury Secretary Scott Bessent played a significant role in the recovery of the cryptocurrency market.
Under this strategy, the US Treasury is repurchasing 10- to 30-year bonds while financing these transactions with shorter-term Treasury bills. This approach, dubbed “Operation Treasury Twist” by some analysts in the markets, aims to reduce the supply of long-term bonds in the market.
According to Farrell, this strategy could contribute to a loosening of financial conditions, putting downward pressure on the dollar. The analyst believes such an environment is particularly positive for Bitcoin, which is seen as a hedge against monetary devaluation.
Farrell also welcomed the US Treasury’s recent decision to continue bond buybacks at $6 billion per transaction.
However, the Treasury has not yet changed the amount of long-term bonds it issuing. But Farrell believes that a slight change in the wording used in the statement could pave the way for more significant steps in the future.
Farrell noted that the Treasury had removed the word “at least” from its previous guidance on keeping bond issuance amounts constant, arguing that this change indicated that issuance of 10- to 30-year bonds could be reduced in the future.
The analyst added that this is not yet a confirmed policy change, but it presents a positive possibility for Bitcoin.
Another key point highlighted in Farrell’s assessment was the growing debt burden of the United States.
The analyst noted that the US budget deficit as a percentage of gross domestic product is between 6 and 7 percent, while the public debt as a percentage of GDP is over 120 percent.
Despite the unemployment rate being relatively low at around 4.2 percent, Farrell found the continued large budget deficits unusual and stated that current conditions could put pressure on the purchasing power of the dollar in the long term.
According to Farrell, the US administration may move to ease financial conditions to finance its high debt burden and support strategic investments such as artificial intelligence infrastructure.
The analyst noted that developments such as long-term interest rates being kept lower than market conditions and the expansion of liquidity could benefit Bitcoin, arguing that monetary devaluation will continue to be a significant investment theme for the cryptocurrency market.
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Speaking about Bitcoin’s price outlook, Farrell said that while there might be short-term fluctuations in the market, his medium- and long-term expectations are positive.
The analyst, noting that he particularly expects the US Treasury Department to continue its market-supportive policies, made the following assessment:
“I think Bitcoin has passed its bottom. I believe the Treasury will continue to support the markets. Next year, we could see an environment where the dollar weakens, liquidity expands, and monetary pressures ease. I think this would be a very positive environment for Bitcoin and the cryptocurrency market in general.”
Farrell also stated that corporate profit growth may be nearing its peak, while liquidity in the markets could accelerate. In such a scenario, he suggested that investors might turn more to alternative assets like Bitcoin.
However, the analyst warned that geopolitical risks related to Iran and funding problems in the AI sector could trigger new waves of selling in the markets in the short term.
*This is not investment advice.
Continue Reading: Analyst Who Predicted Previous Drops Speaks Out on Bitcoin – “U.S. Treasury Move Could Send BTC Soaring”
