We often talk about the reasons why crypto is a good investment for the long-term, but what about in the short-term?

It's often difficult to predict the short-term price fluctuations of crypto, due to the unpredictable news cycle, and the human emotions of fear and greed.

However, in this post we are going to cover a few reasons why we should be optimistic about crypto in the coming months as we approach 2025.

Central Banks Will Lower Rates

The Federal Reserve managed to raise the fed funds rate all the way to 5.25% last summer. Impressive, because the last time rates were this high for this long was back in 2007.

The major difference between 2007 and 2024 is that the federal debt was only $8.7 back then, compared to $35 trillion today!

All the debt that was issued at near 0% since 2009 has been rolling over at 5.25% for almost a year now, increasing interest payments exponentially.

For example, the US government is now having to pay $1 trillion dollars of interest annually on their debt, more than national defense or medicare.

Governments, corporations, and individuals simply cannot afford to continue paying 5.25% interest on the massive debts they have accumulated over the past decades.

The central banks will have to lower rates soon in order to save all these entities from exponential interest payments and bankruptcy.

Otherwise another financial crisis will unfold (which could very well be part of their plan to launch CBDCs).

Politicians Are Shifting Their Stance On Bitcoin

We are seeing more and more prominent politicians shift their opinion on Bitcoin from negative to positive.

For example, all three candidates in the US presidential race have announced that they will accept cryptocurrency donations for their campaigns.

Most notably Donald Trump has pulled a complete 180 on his stance, announcing that Bitcoin may be our last defense against CBDCs.

Global Liquidity Is Rising

In general, crypto responds negatively or positively depending on the amount of liquidity in the financial system, and it appears to be on the rise for a number of reasons:

Other central banks have started lowering interest rates, and who knows what other kind of backdoor bailouts could be occurring in our completely opaque traditional banking system.

The Big Picture

Remember that just because we are in a bullish position for the time being, doesn't mean that a black swan event couldn't cause the markets to take another temporary tumble.

And if the central banks do lower interest rates further that means inflation will worsen, and make life much harder for the average citizen who is living paycheck to paycheck.

So even though crypto is likely to do well in the coming months, we could see a further deterioration of society as inflation, crime, social unrest, and war worsens.

If you learned something new from this article, be sure to check out my other posts on crypto and finance here on the HIVE blockchain. You can also follow me on InLeo for more frequent updates.

Until next time...

Resources

Trump With ETH Image By Venice AI [1]
Fed Funds Rate And Interest Payment Graphs [2]
Global Liquidity Index Tweet [3]