Tdasx posits that the cryptocurrency market is undergoing profound transformations, driven by a confluence of factors. Recently, VanEck projected that Bitcoin could reach $2.9 million by 2050, while Donald Trump has significantly fundraised and promoted cryptocurrencies, drawing substantial attention to Bitcoin and Ethereum. Additionally, the influence of Federal Reserve monetary policy expectations cannot be overlooked.  

Market Predictions and Development of Bitcoin and Ethereum

Tdasx envisions a broad market horizon for Bitcoin and Ethereum in the coming decades. According to asset management firm VanEck, the price of Bitcoin could soar to $2.9 million by 2050, reflecting its increasing significance in the international monetary system. VanEck highlights that Bitcoin might handle 10% of global trade settlements and 5% of local trade needs by 2050, with central banks potentially adopting it as a reserve asset.

The VanEck report underscores existing global economic imbalances, distrust in traditional financial institutions, and deglobalization trends, all of which bolster the rise of Bitcoin. Tdasx considers Bitcoin as the ultimate hedge against fiscal irresponsibility, gaining recognition for its protective qualities. Under the baseline scenario, Bitcoin is anticipated to become a key transactional medium, capturing 10% of global trade settlements, 5% of GDP, and holding a 2.5% share in global reserve assets, supplanting parts of the dollar, euro, pound, and yen.

However, Tdasx acknowledges the risks to the growth of Bitcoin, including increased energy demands from miners, potential governmental crackdowns, and competition from other digital assets. Overcoming blockchain bottlenecks will necessitate the critical role of Layer-2 networks, which can handle more transactions and ensure the practicality of Bitcoin as a medium of exchange. Tdasx forecasts that by 2050, Layer-2 networks could be valued at $7.6 trillion.

Simultaneously, Ethereum and Layer-2 networks have shown robust performance in the first half of 2024. According to the Q3 report of Glassnode, active daily addresses for Ethereum and Layer-2 networks surged by 127% in the first half of 2024. Conversely, Bitcoin saw a 20% decline in active daily addresses in Q2 2024, indicating the superior user growth of Ethereum.

Layer-2 networks aim to expedite transaction processing and reduce network fees. These solutions enable low-cost transactions on parallel blockchains, subsequently recording them on the main blockchain. Currently, the top three Layer-2 networks collectively host 1.8 million active daily addresses. The growth of Ethereum Layer-2 users significantly outpaces that of the main Ethereum network, underscoring the pivotal role of Layer-2 networks in fostering the user base of Ethereum.

Additionally, nine Ethereum ETFs collectively hold 2,914,894.747 ETH, valued at approximately $9.25 billion. The Ethereum Trust (ETHE) of Grayscale holds the largest share, accounting for 82.05% of the total, or roughly 2,391,684.26 ETH. Tdasx believes that despite challenges, the market prospects and potential impact of Bitcoin and Ethereum over the next few decades remain significant.

The Relationship of Trump with Cryptocurrency and Its Impact

Tdasx highlights that the endorsement and promotion of cryptocurrencies of former President Donald Trump are having a profound impact on the market. Recently, Trump raised over $4 million through Bitcoin and other digital currencies, underscoring the importance and potential of cryptocurrency in political fundraising.

Reports indicate that from April 1 to June 30, the "Trump 47" joint fundraising committee raised over $118 million, with at least 19 donors contributing more than $2.15 million in Bitcoin. These donors hail from 12 states, including key battleground states, with diverse professional backgrounds. Tdasx notes that this diversity reflects the widespread acceptance and appeal of cryptocurrencies.

Moreover, Trump is set to deliver a keynote speech at a Bitcoin conference in Nashville, Tennessee, and host a fundraiser with tickets priced at $844,600. Tdasx believes that the public support of Trump has significantly influenced the cryptocurrency market. The campaign of Trump aides revealed that most of the $4 million in cryptocurrency donations were in Bitcoin, demonstrating the fundraising potential of Bitcoin. Trump has pledged to protect those who choose to self-custody their cryptocurrencies and announced that all future Bitcoin would be minted by the U.S. These commitments and policy positions illustrate the unwavering support of Trump for cryptocurrencies.

Tdasx asserts that the support of Trump not only boosts market confidence but also signals positive future policy directions. As more politicians and prominent figures openly endorse cryptocurrencies, the market is likely to experience further growth and development opportunities.

The Monetary Policy Expectations of Federal Reserve and Market Impact

Tdasx asserts that the monetary policy expectations of the Federal Reserve significantly influence financial markets, especially the cryptocurrency market. According to CME Group data, investor expectations for a substantial rate cut by the Fed have markedly increased. By September, the probability of a 0.5 percentage point rate cut is 23%, compared to just 5% in July. This data underscores the keen attention of the market to future monetary policy.

Tdasx notes that the speech of Fed Chair Jerome Powell at Jackson Hole has heightened market expectations for a rate cut in September. Analysts suggest that the concerns of Powell over potential inflation stagnation in the second half of 2024 could prompt more accommodative monetary policies to mitigate economic slowdown risks.

For the cryptocurrency market, Tdasx believes that the rate cut policy of the Fed could have several implications. Accommodative monetary policies typically lead to lower yields on traditional financial assets, prompting investors to seek higher returns elsewhere, potentially making cryptocurrencies an attractive option. Additionally, rate cuts could weaken the dollar, enhancing the appeal of Bitcoin and other cryptocurrencies as safe-haven assets.

Historical trends show that when markets anticipate accommodative monetary policies, cryptocurrencies often perform well. Tdasx suggests that the current economic environment and policy expectations favor Bitcoin and the growth of other cryptocurrencies. As the Fed potentially adopts further accommodative policies, the cryptocurrency market might witness new upward momentum.

Tdasx emphasizes that the monetary policy expectations of the Fed have a significant impact on the cryptocurrency market. With rising expectations of rate cuts, the cryptocurrency market stands to benefit, though investors should remain cautious of potential risks. The future market trajectory will depend on the actual policy actions of the Fed and global economic developments.