Bitcoin Surge Under Trump Leadership Encounters Ambiguity Ahead of Fed’s January Rate Decision: 10x Review

A potential Bitcoin surge, expected to gain traction ahead of Donald Trump’s inauguration on January 20, may encounter obstacles later in the month as the Federal Reserve prepares for its initial interest rate decision of the year.

In a report released on January 5, Markus Thielen, founder of 10x Research, shared his outlook for Bitcoin’s path in January, emphasizing that market conditions remain closely tied to inflation data and Federal Reserve policies.

Thielen anticipates a “positive start” to the month, supported by optimism surrounding the January 15 release of the Consumer Price Index (CPI) inflation data.

Favorable CPI May Bolster Bitcoin Rally

A favorable CPI report could enhance Bitcoin’s rally leading up to Trump’s inauguration.

However, Thielen warns that this momentum might wane as the Federal Open Market Committee (FOMC) meeting on January 29 draws near.

He pointed out that communications from the Federal Reserve pose the “primary risk” to a sustained Bitcoin rally in 2025.

The CME Group’s FedWatch tool currently indicates an 88.8% probability that the Federal Reserve will maintain its target rate between 425 and 450 basis points after the FOMC meeting.

Bitcoin’s history with FOMC decisions has been volatile; the cryptocurrency dropped nearly 15% to $92,800 following the December 18 meeting, when the Fed reduced its projected 2025 rate cuts from 5 to 2.

Thielen expects that while inflation is likely to decrease in 2025, the Federal Reserve may take time to adjust its policies accordingly.

Our #Bitcoin/Crypto Game Plan for January – This Indicator Signals a BTC Rebound
1-12) The crypto trading environment remains mixed following the December FOMC meeting and the subsequent holiday season. However, opportunities for returns persist in specific areas. For… pic.twitter.com/otODXb7GgZ

— 10x Research (@10x_Research) January 5, 2025

Institutional investor activity will also significantly influence Bitcoin’s market.

According to Thielen, indicators such as stablecoin issuance and spot Bitcoin exchange-traded fund (ETF) inflows could be crucial metrics to monitor.

He predicts Bitcoin’s price will range between $97,000 and $98,000 by the end of January.

Ethereum to Underperform in 2025

Last week, Thielen expressed skepticism regarding Ethereum’s prospects during the anticipated 2025 bull market, forecasting that the cryptocurrency may lag behind Bitcoin in generating returns.

In a market report dated December 30, Thielen characterized Ethereum as a “poor medium-term investment,” citing concerns about its lack of significant catalysts and a declining growth rate in active validators.

Over the past 30 days, the number of active validators has decreased by approximately 1%, indicating potential instability.

Thielen also observed that Ethereum’s demand outside of staking appears insufficient to support substantial price rallies, advising investors to “steer clear” of the asset for the time being.

It’s noteworthy that the Bitcoin network processed over $19 trillion in transactions in 2024, more than doubling the $8.7 trillion settled in 2023.

This increase represents a significant turnaround following two years of declining transaction volumes since 2021.

During the 2021 bull market, Bitcoin’s transaction volume peaked at $47 trillion but fell sharply in the subsequent years.

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