BlackRock, the largest issuer of Bitcoin ETFs, has issued a warning of unprecedented circumstances that could impact Bitcoin prices and the cryptocurrency market. Analysts from BlackRock indicate that central banks globally are compelled to maintain interest rates above pre-pandemic levels due to sustained inflationary pressures. With supply constraints, the new macroeconomic regime is characterized by rising inflation, higher interest rates, and slowed growth, a chaotic scenario expected to persist long-term.
Earlier this month, US Treasury Secretary Yellen suggested that the Fed would maintain interest rates at elevated levels, complicating deficit control and interest expenses for the US Treasury, potentially leading to a collapse in Bitcoin and other cryptocurrencies. Bitcoin’s price movement directly reflects market sentiment towards this warning. Since reaching a peak of $71,907 on June 7, Bitcoin has since declined approximately 10%.