Crypto Experts Hold Firm on Bullish Bitcoin Forecast Amid Fed Rate Cut Hopes Versus Stagflation Concerns

Bitcoin bulls dig in as monetary policy uncertainty creates perfect storm for digital gold narrative.

Fed's Dilemma: Cut Rates or Fight Inflation?

Speculation swirls around potential Federal Reserve moves as economic indicators flash conflicting signals. Rate cuts could unleash torrents of liquidity into risk assets—traditional fuel for crypto rallies. Yet stubborn inflation pressures force policymakers into dangerous balancing act.

Stagflation Specter Haunts Traditional Markets

Simultaneous economic stagnation and rising prices create nightmare scenario for conventional portfolios. Bonds get crushed, stocks struggle, and cash evaporates to inflation. Sound familiar? It's the exact environment where Bitcoin historically thrives as non-sovereign store of value.

Crypto's Perfect Narrative Storm

Digital asset proponents see textbook setup unfolding: easy monetary policy meets structural dollar weakness. Meanwhile, Wall Street still tries to price Bitcoin using outdated equity valuation models—because nothing says 'digital gold' like comparing it to growth stocks.

Volatility Ahead, Conviction Intact

Expect rocky price action as traders wrestle with macro crosscurrents. But core believers maintain perspective: Bitcoin wasn't built for quarterly earnings cycles. It was built for precisely this kind of monetary system stress test.

Standout tokens

As bitcoin and other major cryptocurrencies reach new all-time highs, a select group of altcoins is poised to experience significant rallies. Notably, there is a growing consensus about solana's (SOL) price prospects.

"We have seen strong demand for SOL during the past 2 weeks. SOLBTC is trading at its highest level in seven months and pushing up against the psychological 0.002 level, with strong upward momentum continuing from early August. Rotation into SOL is naturally occurring as several SOL DATs are coming online, with over $1B raised (or being raised) into various SOL vehicles," Gaer explained.

The other favorites among industry participants are the DeFi protocol Ethena's ENA token and its synthetic dollar, USDe, as well as decentralised exchange Hyperliquid's HYPE token.

"Younger investors aren’t interested in slow 7% annualized returns. Instead they’re turning to perpetuals markets and trading with leverage, making riskier bets with greater upside potential. Hyperliquid is built for exactly that type of user: it’s permissionless, always-on, and increasingly positioned as the go-to for high-beta plays, especially among younger investors who view volatility as a feature, not a bug," Molidor said explaining the bullish case for Hyperliquid's HYPE token.

He pointed out the yield advantage Ethena has as the Fed cuts rates, driving down the return on traditional fixed-income instruments and dollar equivalents, such as stablecoins.

Think of it like the popular yield-differential strategy in foreign exchange markets, where a country’s currency tends to strengthen when its bond yields rise relative to others, attracting capital flows due to higher returns.

"As the Fed cuts rates and short-term T-Bill yields fall, traditional stablecoins like Circle’s become less profitable and Ethena’s tokenized basis trade becomes more lucrative. It’s a rare circumstance where Ethena’s stablecoin yields go up as Fed rates come down, which could make the token particularly attractive in the next phase of the market cycle," he noted.

Auros pointed to CRO along with SOL, BNB and HYPE as key tokens to watch out for during the next upswing in the crypto market.