FED Policy Is Hurting Bitcoin, Warns Economist Timothy Peterson

Could Bitcoin be worth 50% more right now? According to economist Timothy Peterson, the answer is yes – and the culprit behind its stagnation is none other than the U.S. Federal Reserve.

In a bold critique posted on X, Peterson claimed the Fed has overcorrected with its monetary tightening, causing ripple effects that are damaging both the U.S. economy and the crypto market.

Is the Fed Making the Economy Worse?

Peterson argues that the Fed’s aggressive reduction of the money supply is fueling deflation, not stability. And that’s bad news for economic growth.

“The Fed still doesn’t realize the real issue is its own policy,” Peterson wrote.

He warns that falling prices, decreased consumer spending, and a broader slowdown are clear indicators of a weakening economy. In his view, less money in circulation is putting pressure on both consumers and businesses, stifling innovation and growth.

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The Reality Check Behind ‘Strong’ Job Numbers

While the U.S. unemployment rate sits at a seemingly healthy 4.2%, the numbers don’t tell the whole story. A LendingTree survey recently revealed that over 25% of Americans are using Buy Now, Pay Later (BNPL) services just to afford groceries – up sharply from 14% last year.

Peterson sees this trend as a red flag: despite favorable employment data, financial strain is growing for the average American.

Bitcoin’s Potential Is Choked by Policy Missteps

Peterson estimates that Bitcoin’s current price could be 30% to 50% higher if the Fed had successfully executed a “soft landing” for the economy. But instead, he says, the central bank’s missteps are weighing down the crypto market and stalling its momentum.

Looking ahead, Peterson cautions that the long-term impact of these policies may drag on for years – affecting both the broader economy and the future of digital assets like Bitcoin.

His advice? Investors should proceed with caution and be highly selective in their strategies.

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