The Federal Reserve's monetary policies significantly influence various asset classes, including cryptocurrencies like Bitcoin. Historically, expansionary monetary policies, such as lowering interest rates or implementing quantitative easing, have led investors to seek higher returns in alternative assets, benefiting Bitcoin's price. Conversely, tightening policies can reduce liquidity, potentially dampening Bitcoin's appeal.�

Recent developments highlight this dynamic. In December 2024, Federal Reserve Chair Jerome Powell stated that the Fed is not permitted to hold Bitcoin and has no intention to change that stance. This underscores the Fed's cautious approach toward direct involvement with cryptocurrencies.�
reuters.com

Moreover, studies have shown that monetary policy shocks can decrease cryptocurrency prices and increase volatility. This suggests that unexpected policy changes can negatively impact Bitcoin's value.�
journals.sagepub.com
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arxiv.org
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In summary, while the Federal Reserve's policies can influence Bitcoin's price indirectly through broader economic conditions, the Fed does not directly engage with or hold Bitcoin.