Bitcoin Is Rising… But The Fed Could Make It Fall Again

As bitcoin surges to new highs, some analysts cry out for rational euphoria. Others, more cautious, remind us that the party could be short-lived. Behind the dizzying numbers and cascading records looms a shadow: that of the U.S. Federal Reserve. Because while markets anticipate a rate cut, JPMorgan CEO Jamie Dimon plays the role of party pooper and suggests the opposite. A bad surprise from the Fed could derail bitcoin’s momentum, especially in a context where retail investors remain curiously absent. Is the king of cryptos running on empty? Breakdown.

Bitcoin climbs, but the illusion awaits

The recent surge of bitcoin to historic highs, flirting with $118,000, might suggest a new bull run. Yet, beneath the golden veneer of euphoric charts, a crack appears: the almost total absence of retail investors. This is a rise driven by institutions, by ETFs boosted with billions, but whose roots remain fragile because they are disconnected from the popular momentum that historically accompanies major bull cycles.

Google searches for the term “bitcoin” have only increased by 8% despite these records and remain 60% below the November 2024 peak, post-Trump election. A striking contrast reflecting a psychological reality: retail investors think they have missed the train. The result? They stay on the platform while the locomotive takes off without them. And this absence of popular support could become a Achilles’ heel if the macroeconomic wind shifts.

Worse still, this retail disinterest is interpreted by some as a hidden bearish signal. Because when an asset rises without popular enthusiasm, it lacks a true emotional foundation. Greed is absent, which also means panic is not far behind.

The Damocles sword of the Fed: when monetary policy could reverse the trend

Jamie Dimon, JPMorgan’s CEO, sows doubt in an overly confident market. According to him, traders seriously underestimate the risk of further monetary tightening. Where the market assigns only a 20% probability to a rate hike, Dimon bets between 40 and 50%. A statement that acts like a warning: what if the Fed does not ease, or even raises rates again?

CME FedWatch data still suggest hope: a 59.7% chance of a 25 basis points cut in September. But beware the illusion of consensus. Inflation remains fueled by exogenous factors such as tariffs, immigration, or the budget deficit. So many time bombs that could tip the balance in favor of a status quo or even tightening.

And in this scenario, bitcoin could be violently caught up by reality. Because despite its decentralized asset status, the crypto queen is not immune to liquidity shocks or macro sentiment reversals. A rate hike, even moderate, could reduce appetite for risk, and institutions (the current drivers of the rally) are not known for their loyalty during turbulent times.

The illusion of records: when ETFs mask market timidity

The paradox is glaring: spot Bitcoin ETFs have never recorded such inflows: more than $2.7 billion in one week. And yet, retail markets have never seemed so indifferent. This disconnect between institutional flows and popular inertia could become the swan song of this rise, if it comes to rely on a single pillar too narrow.

Because a healthy market relies on balance: institutions bring volume, but retail investors provide dynamics and longevity. Yet, the absence of “small holders” raises a harsh question: what will happen if institutions take profits before the general public returns? The very idea that the current rise rests solely on structured funds, with cold and mechanical arbitrages, must alert us.

And if the rate environment does not become more accommodating, if geopolitical uncertainty persists, then bitcoin’s strength could be tested sooner than expected. Those who think $117,000 is the new floor may soon discover they were actually walking on a slab suspended over a void.

Bitcoin is high, certainly. But it is alone. Without retail support, and with the threat of monetary tightening, the correction could be brutal. This is not about predicting a crash, but about reminding that any peak reached without popular foundation or lasting macroeconomic clarity runs a serious risk of collapsing on itself. Arthur Hayes, for his part, anticipates a drop to $90,000 before a potential tenfold rally.