The cryptocurrency market has seen plenty of volatility in recent months. Bitcoin (BTC), while showing signs of resilience, continues to hover around the $100,000 mark. According to macro investor and fund manager Dan Tapiero, a true comeback for crypto won’t begin until one critical shift happens: a change in monetary policy.
In a recent interview on the Milk Road YouTube channel, Tapiero laid out a clear case for what could trigger the next major bull run for Bitcoin and the broader digital asset ecosystem. His views center on the balance, or imbalance, between fiscal and monetary strategies in the U.S. economy.
The Monetary-Fiscal Disconnect
Tapiero believes the U.S. economy is currently facing a mismatch between fiscal tightening and the lack of supportive monetary policy. He pointed out that while the government is pulling back on fiscal spending, the Federal Reserve under Chair Jerome Powell has yet to ease monetary conditions to match.
“Fiscal tightening needs to be offset by some sort of monetary offset,” Tapiero said. Without that balance, the economy faces a risk of a steep slowdown due to reduced liquidity and demand.
Tapiero emphasized that fiscal policy has been a strong driver of demand in recent years. Now, as it weakens, something needs to fill the gap.
“The dollar is already sensing that and that’s why it’s weakened,” he explained. “Ideally, in a perfect world, Treasury Secretary Bessent and [former President] Trump or whoever should have gone down to Jay Powell and said, ‘Hey guys, we’re about to undertake the greatest fiscal tightening of the last 50 years—give us some slack on the monetary side.’”
But according to Tapiero, Powell is holding back, possibly waiting for more data. Tapiero predicts that the data over the coming months will make it clear that a shift is necessary. When that happens, he believes Bitcoin and the entire crypto ecosystem will take off.
Why Bitcoin Needs “Old World” Liquidity
Tapiero acknowledges the solid fundamentals supporting Bitcoin and other digital assets. The rise of decentralized finance (DeFi), stablecoins, and even the early signs of a potential NFT comeback all indicate a healthy and innovative sector. But innovation alone won’t be enough, he says.
“There is a part of our world that is driven by this liquidity from the old world,” Tapiero noted. In other words, despite the decentralized nature of crypto, traditional finance still plays a major role in market movement.
He explained that a modest increase in liquidity from traditional financial systems, what he calls the “old world”, could be the missing ingredient to send Bitcoin soaring.
“Just a little bit of liquidity from the old world comes in, and you have Bitcoin head up to my target,” he said. That target? A long-standing price prediction of $180,000.
Tapiero isn’t just pulling that number out of thin air. He’s been consistent with this forecast, maintaining that the combination of solid fundamentals and renewed liquidity would drive Bitcoin near that level. If things align even further, he suggests, BTC could push close to $200,000.
BTC Price Update and Market Sentiment
At the time of writing, Bitcoin is trading at $103,159, showing a slight increase for the day. While far from its all-time high, BTC has been relatively stable over the past few weeks.
Market sentiment remains mixed. Some investors are cautiously optimistic, pointing to slowing inflation and steady institutional interest. Others remain concerned about regulatory hurdles, interest rate uncertainty, and global economic weakness.
Tapiero’s remarks come at a time when crypto markets are searching for direction. With major altcoins like Ethereum and Solana also facing resistance, traders and analysts alike are looking for a catalyst.
Ethereum, Solana, and the Ecosystem’s Role
While Bitcoin remains the headline act, Tapiero also referenced the broader ecosystem, including Ethereum, Solana, and other decentralized projects. He believes the entire space stands to benefit once monetary conditions ease.
Ethereum, which has seen steady development and growing use cases in DeFi and NFTs, could also rebound alongside Bitcoin. Solana, known for its speed and scalability, may attract new developers and users if optimism returns.
Even NFTs, which saw a dramatic rise and fall over the past two years, are starting to show signs of life again. Some platforms are reporting an uptick in sales and user activity, hinting at a potential second wave of adoption.
Key Takeaways for Investors
For investors wondering when to re-enter the crypto market or whether to stay the course, Tapiero’s insights offer a strategic perspective:
- Watch the Federal Reserve: A policy shift from Jerome Powell, especially in the form of interest rate cuts or increased liquidity, could be the starting gun for a crypto bull run.
- Don’t underestimate macro conditions: Crypto may be digital and decentralized, but it is still tied to the broader financial system.
- Liquidity matters: Even a small influx of capital from traditional finance can have a major impact on digital assets.
- Strong fundamentals aren’t enough: Innovation and adoption are important, but monetary policy often drives short-term price movements.
What Comes Next?
Looking ahead, the market will be closely watching upcoming economic data releases, including inflation numbers, GDP reports, and employment stats. If these indicators point toward economic weakness, pressure may mount on the Federal Reserve to adjust its stance.
Any dovish signals from the Fed could quickly shift investor sentiment and push crypto markets into rally mode.
In the meantime, Tapiero urges patience. “The next few months will be critical,” he said. “Once Powell moves, the door opens for Bitcoin and the whole space to really take off.”
Conclusion
Dan Tapiero’s outlook offers a clear roadmap for what could trigger the next wave of growth in the crypto sector. While Bitcoin remains steady for now, its fate may hinge on monetary policy decisions made in Washington.
Should the Federal Reserve decide to pivot, the crypto market could be poised for its most significant rally in years. Until then, investors are keeping a close eye on the data and hoping for the right conditions to align.
