Bitcoin is under pressure as geopolitical tensions, Federal Reserve leadership uncertainty, and US regulatory delays send crypto markets into a volatile correction, amplifying short-term risks without undermining long-term adoption trends.
Market weighs Fed chair’s accomplishments as Bitcoin weathers macro-driven selloff
We are entering a period of heightened uncertainty across digital asset markets as macroeconomic and political forces intersect. Price volatility has intensified as geopolitical tensions, uncertainty over Federal Reserve leadership, and delays in US regulatory action shape sentiment across the crypto sector.
James Butterfill, Head of Research at Coinshares, shared his assessment of the current market situation, characterizing recent price action as corrective rather than structurally damaging. He said:
“Bitcoin is currently in a phase where it is being corrected by multiple factors simultaneously.”
“Recent geopolitical stresses over Greenland and the threat of new tariffs similar to last October’s developments with China are weighing on market sentiment,” he elaborated. “Additionally, sustained selling pressure from large market participants (‘whales’) is pushing prices down in the short term. The widely cited four-year cycle theory is fundamentally unconvincing, but it has become increasingly self-fulfilling and is contributing to the current pullback.”
“Historically, geopolitical shocks tend to follow a similar pattern. Events such as the collapse of the yen carry trade or trade-related disputes first cause a sharp decline in Bitcoin before a stabilization phase begins. The trajectory always varies depending on the specific nature of the event,” Butterfill explained.
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Along with geopolitics, uncertainty surrounding the succession of the next US Federal Reserve Chairman has emerged as another influential variable for digital assets. Support for Kevin Warsh has increased in prediction markets after President Trump indicated that his chief of staff, Kevin Hassett, is likely to remain in his current role, raising hopes for a more restrained monetary stance.
Butterfill emphasized that short-term stories may be exaggerated, concluding:
“In the short term, geopolitical risks and Fed succession issues continue to be the driving force for Bitcoin. However, in the medium to long term, the familiar pattern of geopolitical stress causing volatility, but not necessarily structural weakness, continues.”
Regulatory headwinds also continue, with the U.S. Clarity Act facing delays in the Senate Banking Committee amid controversy over stablecoin rewards, increasing uncertainty without changing long-term adoption trends.
FAQ ⏰
- Why is Bitcoin volatility increasing now?
Geopolitical tensions, uncertainty in Fed guidance, and regulatory delays are causing short-term price volatility. - Is Bitcoin’s current decline a sign of structural weakness?
Coinshares research characterizes this move as a correction rather than long-term damage. - How will the Federal Reserve’s successor impact the crypto market?
Expectations for a stricter monetary stance are impacting near-term Bitcoin sentiment. - What role do transparency laws play in crypto uncertainty?
Delays in the Senate’s transparency bill increase regulatory uncertainty while adoption trends remain the same.
