‘Flood The Market’—‘Major’ Fed Flip Predicted To Blow Up The Bitcoin Price (2025)

Bitcoin and crypto prices have dropped after U.S. president Donald Trump followed through with his threatened "Liberation Day" of global trade tariffs—dropping an “atomic bomb” on markets.

The bitcoin price has fallen back after climbing in the run up to Trump’s tariff announcement as traders scramble to parse the so-called reciprocal tariffs (and stay ahead of a serious new threat).

Now, as the chief executive of BlackRock warns bitcoin could end the U.S. dollar’s world’s reserve currency status, traders are betting the Federal Reserve will be forced to cut interest rates to stave off a U.S. recession—something that could see the market “flooded” with dollars.

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Forbes‘A Safer Bet’—BlackRock CEO Issues Huge $952 Billion Bitcoin Price Warning To The U.S. DollarBy Billy Bambrough

Short-term interest-rate futures are showing a 70% chance of a Fed interest rate cut when it meets in June, up from about 60% before the tariffs were announced.

Recession fears have seen traders have boost bets the Fed will restart its interest rate cutting cycle this summer and deliver a total of three quarter-point reductions to the policy rate by October, it was reported by Reuters.

Trump’s so-called “Liberation Day” barrage of trade tariffs have pushed the probability of a U.S. recession to over 50% on prediction markets Polymarket and Kalshi.

"Remember—tariffs are dovish, and big tariffs are very dovish," Joseph Wang, operator of the research portal Fedguy.com posted to X.

In a closely-watched Wednesday announcement, Trump slapped 10% tariffs on most goods imported to the U.S., as well as even higher duties on dozens of countries.

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Forbes‘Nobody Is Safe’—Shock Fed Trump Warning Could Suddenly Trigger Bitcoin Price ChaosBy Billy Bambrough

Last September, the Fed’s surprise 50 basis point interest rate cut helped kick off the bitcoin price rally that fed into Donald Trump’s election victory in November.

“I still believe bitcoin can hit $250,000 by year-end because now that the [U.S. Treasury secretary Scott Bessent] has put [Fed chair Jerome] Powell in his place, the Fed will flood the market with dollars,” Arthur Hayes, a cofounder of crypto derivatives pioneer BitMex, wrote in a blog post.

“If my analysis of the Fed’s major pivot from quantitive tightening to quantitive easing for treasuries is correct, then bitcoin hit a local low of $76,500 last month, and now we begin the ascent to $250,000 by year-end. Of course, this is not an exact science, but using the gold example, if I had to place a bet on whether I thought bitcoin would hit $76,500 or $110,000 first, I would bet on the latter.”

Last month, Powell warned the risk of recession is rising—something BlackRock’s head of bitcoin and crypto has predicted could be a “big catalyst” for the bitcoin price.