Federal Reserve Monthly Report: Policy Battles and Bitcoin's Double Impact Breaking Through $96,000

Global central bank governors issue a joint statement expressing “full support” for Federal Reserve Chair Jerome Powell. A few days ago, U.S. Senators proposed the “Anti-CBDC Surveillance State Act,” explicitly banning the Federal Reserve from issuing a central bank digital currency.

Meanwhile, the latest data shows that the U.S. December CPI increased by 2.7% year-over-year, in line with market expectations. Against the backdrop of moderate inflation slowdown, Bitcoin’s price surged past the $95,000 key resistance level on January 14, with an intraday increase of 4.5%, briefly breaking through the $96,000 mark.

01 Policy Game

Recently, there has been frequent policy activity related to the Federal Reserve, from digital currency legislation to international central bank joint statements. A series of events are reshaping market expectations for future monetary policy.

The anti-CBDC bill in the U.S. Senate has attracted widespread attention. Proposed by multiple Republican senators, the bill explicitly prohibits the Federal Reserve from issuing a central bank digital currency.

Supporters argue that CBDC could lead to “financial surveillance and monitoring” and potentially “turn the Federal Reserve into a retail bank.”

Senator Cruz emphasized in a statement: “Cryptocurrency represents financial freedom, innovation, and privacy,” while CBDC could “erode these core values.”

On the international level, including the European Central Bank, Bank of England, Swiss National Bank, and other major central banks, issued a joint statement expressing “full support” for Powell.

This statement, released on January 13, emphasizes that “central bank independence is the cornerstone of price, financial, and economic stability.”

02 Market Response

While the Federal Reserve’s policy game unfolds, the crypto market has responded with sharp price movements. Expectations that the Fed may slow interest rate hikes continue to ferment, creating a favorable environment for risk assets.

The latest inflation data shows that the U.S. December CPI increased by 2.7% YoY, in line with expectations; core CPI rose by 2.6%, slightly below forecasts.

Bitcoin broke through the $94,500 key resistance level on January 14, with a 4.5% intraday increase, approaching $96,000 and hitting a nearly two-month high.

The Crypto Fear & Greed Index rebounded sharply from 26 (fear) 24 hours ago to 48 (neutral), indicating a significant improvement in market sentiment.

Meanwhile, gold and silver prices both hit record highs, reflecting investors’ continued preference for traditional safe-haven assets. The simultaneous rise of these precious metals and cryptocurrencies suggests that the market may be positioning itself in anticipation of a more accommodative monetary policy environment.

03 Regulatory Environment

The evolution of the U.S. cryptocurrency regulatory framework is also worth noting, as policy developments could have profound impacts on future market trends.

SEC Chairman Gary Gensler recently expressed confidence that the cryptocurrency market structure bill “CLARITY” will be submitted to President Trump for signing this year.

This bill is seen as a potentially important legislation to provide a clearer regulatory framework for digital assets in the U.S.

Meanwhile, the U.S. Senate Agriculture Committee has rescheduled its cryptocurrency bill hearing to January 27. This hearing may involve discussions on the regulatory framework for digital commodities and could guide compliance development in the crypto industry.

On the international front, Thailand is strengthening digital asset regulation, emphasizing travel rules and wallet-to-wallet identity verification, and plans to establish a national data bureau.

These regulatory developments reflect a global trend toward tightening cryptocurrency oversight and also demonstrate legislators’ efforts to provide clearer rules for the market.

04 On-Chain Trends and Investment Tools

In the face of a complex and volatile market environment, investors need more efficient tools to capture opportunities. Recent on-chain data shows a significant reduction in Bitcoin supply on exchanges, providing more solid medium-term support for prices.

Gate Research Institute reports that over the past year, Bitcoin supply on exchanges has decreased by more than 400,000 coins, easing spot selling pressure. This structural change may indicate that long-term holders are accumulating Bitcoin, reducing the available supply in the short-term market.

Gate Alpha, as a one-stop on-chain asset trading product, offers users the opportunity to participate in early on-chain projects. The product supports direct trading of popular on-chain projects using USDT, without the need to manage complex Web3 wallets.

Through intelligent monitoring systems, Gate Alpha can capture on-chain hot spots in real-time and quickly list promising projects. This rapid response mechanism allows investors to participate early in market hot spots.

Recent Key Federal Reserve Events and Market Reactions

05 Diversified Investment Strategies

In the context of ongoing uncertainty in Federal Reserve policies, diversified investment strategies are especially important. Gate Research Institute’s backtesting report shows that for BTC, ETH, SOL, GT, and their combinations, dollar-cost averaging strategies have demonstrated significant advantages from September 1, 2021, to December 30, 2024.

Polygon Labs recently acquired crypto startup Coinme and Sequence for over $250 million, strengthening its stablecoin and on-chain payment stack. This acquisition grants Polygon 48 U.S. money transfer licenses and 50,000 physical fiat channels.

Franklin Templeton upgraded two institutional money market funds to meet the “Stablecoin Reserve Asset Standard” and launched on-chain share classes. This move is helping to eliminate barriers between traditional finance and decentralized finance, allowing regulated money market instruments to be directly used as high-quality, interest-bearing collateral in lending and payment protocols on-chain.

Bitwise’s latest survey of financial advisors shows that client crypto allocations soared to record highs last year. About 32% of advisors now allocate cryptocurrencies in client accounts, up from 22% last year.

Future Outlook

The interaction between the crypto market and traditional finance has never been closer. When Fed policy shifts, Bitcoin price quickly breaks through the $96,000 resistance; when international central banks jointly support Fed independence, market confidence in policy continuity is strengthened.

The proposal of the Senate’s anti-CBDC bill reflects policymakers’ concerns about digital currency monitoring risks. The continuous decrease in Bitcoin exchange supply, with over 400,000 coins flowing out, is building a more solid support foundation for the market.

In Gate Research Institute’s market analysis, one conclusion remains unchanged: the best way to navigate policy cycles is to find structural opportunities amid volatility and build diversified allocations amid uncertainty.