The Federal Reserve’s Bank Term Funding Program (BTFP) is coming to an end on March 11, 2024, leaving the Bitcoin and crypto market on edge.
BTFP Closure and Its Impact on Bitcoin
The BTFP has been a lifeline for US banks, providing loans to ensure liquidity during turbulent times. Its closure could affect banks’ ability to lend, potentially slowing down economic growth.
However, experts believe the Fed may adopt a more lenient monetary policy to counter this, which could benefit Bitcoin and the broader market.
Expert Opinions
Arthur Hayes (BitMEX)
- Predicts a severe market correction if liquidity sources dry up.
- Anticipates a 30-40% correction in Bitcoin prices.
- Remains optimistic about a potential rebound ahead of the Fed’s meeting on March 20.
Balaji Srinivasan (Former CTO of Coinbase)
- Highlights the coincidence of the BTFP’s end with Bitcoin’s halving event.
- Suggests this timing could amplify market reactions.
Ansel Lindner (BTC Markets)
- Points to signs of stress in the banking sector.
- Draws parallels to last March’s banking crisis, which led to a Bitcoin rally.
Conclusion
The end of the BTFP marks a critical moment for the Bitcoin and crypto markets. Potential outcomes range from significant downturns to bullish recoveries, depending on the Fed’s actions and broader macroeconomic trends.
The market is at a crossroads, with Bitcoin’s fate hanging in the balance.
