Further devaluation of the US dollar in 2026 will send Bitcoin’s price soaring, analysts say.
Bitcoin is the best expression of the dollar debasement trade and “will regain its throne as the number one performing macro asset in 2026”, analysts David Brickell and Chris Mills of the London Crypto Club said in their weekly newsletter.
US President Donald Trump will “hand out the candy” before the November midterm elections of new lawmakers, which are largely seen as a high-stakes referendum on the performance of the White House, they predict.
BitMEX co-founder Arthur Hayes’ made a similar argument at the top of the year, arguing that dollar-debasement coupled with government handouts will catapult Bitcoin’s price to $200,000 in the first quarter of 2026.
Brickell and Mills’ call comes as the value of the dollar has plunged nearly 10% over the past year.
The greenback’s weakness was initially triggered by Trump’s launch of a trade war against China and other major US trading partners.
It has since been hammered by significant geopolitical turbulence and expectations the Federal Reserve will continue slashing interest rates and injecting more money to the tune of hundreds of billions into the economy.
Brickell and Mills said the Trump administration is looking to “run it hot” and that the debasement trade “is set to go into overdrive” in 2026.
Fewer sellers
Traders who bought at near Bitcoin’s all-time high of $126,00 will be looking to sell in order to break even, the pair say.
But there are now fewer whales seeking to take profit.
“Onchain analytics now suggest reduced profit taking and consequent supply pressure from whales and long term holders, with realised price gains decelerating,” they said.
The top crypto is trading just above $91,000 at time of reporting, nearly 30% down from its all-time high.
Drama at the Fed
Crypto assets like Bitcoin are heavily dependent on available money supply. Prices are strongly connected to Fed policy.
Trump has pressured the Fed and its chair, Jerome Powell, to trigger faster and deeper rate cuts in order to support the US economy. Yet, his aggressive rhetoric towards the Fed has spooked some investors who fear the central bank’s independence is under threat.
The Fed has traditionally been free of pressure from the White House, and operates on a mandate of ensuring stable prices and maximum employment.
On Sunday, Powell pledged to hold firm in a video message confirming that the Department of Justice is launching a formal criminal investigation into the central bank.
“This unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure,” Powell said.
The CME FedWatch tool shows that the Fed is likely to hold interest rates at their current level during the next Open Market Committee meeting on January 28.
Crypto market movers
Bitcoin is down up 0.2% over the past 24 hours, trading at $90,716.
Ethereum is up 0.6% past 24 hours at $3,116.
