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    Vignesh is a young journalist with a decade of experience. A proud alumnus of IIJNM, Bengaluru, he spent six years as a Sub-Editor for a leading business magazine, published from Kerala. His interest in futuristic technologies took him to a US-based software company specialising in Web3, Blockchain and AI. This stint inspired him to view the future of journalism through the lens of next generation technologies. Now, he covers the crypto scene for Coinpedia, uncovering a vibrant new world where technology and journalism converge.

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    FED Policy Is Hurting Bitcoin, Warns Economist Timothy Peterson

    Story Highlights
    • Economist Timothy Peterson blames Fedโ€™s tight monetary policy for stalling Bitcoinโ€™s price growth by up to 50%.

    • Despite low unemployment, rising BNPL grocery purchases signal deeper economic stress, says Peterson.

    Economist Timothy Peterson believes Bitcoinโ€™s price is being held back by poor decisions from the U.S. Federal Reserve.

    In a recent post on X, Peterson said the Fed has made a big mistake by tightening monetary policy too much. According to him, this move is hurting the U.S. economyโ€”and stopping Bitcoin from reaching its true potential.

    Is the Fed Making the Economy Worse?

    Peterson explained that the Fed has reduced the money supply too aggressively, which is now causing deflation. He pointed out that falling prices, lower spending, and slowing growth are signs that the economy is weakeningโ€”not strengthening.

    โ€œThe Fed still doesnโ€™t realize the real issue is its own policy,โ€ Peterson wrote.

    He believes the U.S. economy is shrinking because there isnโ€™t enough money circulating. This situation makes it harder for both businesses and consumers to thrive.

    Real Struggles Behind Good-Looking Stats

    While the unemployment rate is just 4.2%, a recent LendingTree survey shows that more than 25% of Americans are using Buy Now, Pay Later (BNPL) loans to buy groceriesโ€”up from 14% last year. Peterson says this is proof that many people are struggling, even if the job numbers look good.

    Bitcoinโ€™s Growth Being Held Back?

    Peterson claims that Bitcoin could be 30% to 50% higher today if the Fed had managed a proper โ€œsoft landingโ€ for the economy. Instead, the current policies are limiting its price growth.

    He warned that both the economy and crypto market could feel the effects of these policy mistakes for years. Investors, he says, should be cautious and make selective decisions moving forward.

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    FAQs

    How is the Federal Reserve affecting Bitcoin prices?

    Economist Timothy Peterson says tight Fed policies are slowing growth and holding Bitcoin 30โ€“50% below its potential.

    What does deflation mean for the U.S. economy?

    Deflation reduces spending and growth, making it harder for businesses and consumers to thrive, says Peterson.

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