Bitcoin Could Rally in 2026 on Fed Liquidity, Though Analysts Divided on Outlook

The cryptocurrency market faces conflicting predictions for 2026, with industry leaders divided over Bitcoin's trajectory as monetary policy shifts take center stage.

Abra CEO Bill Barhydt forecasts significant price appreciation for Bitcoin, citing expectations of substantial liquidity infusions from the Federal Reserve through continued rate cuts and potential quantitative easing measures. Speaking to Schwab Network, Barhydt noted the central bank has already begun purchasing its own bonds, signaling what he describes as "quantitative easing light." He anticipates declining demand for government debt alongside falling rates will create favorable conditions for risk assets including cryptocurrency.

Barhydt also pointed to improving regulatory frameworks and expanding institutional participation as additional tailwinds for the crypto sector over the coming years.

However, veteran Bitcoin investor Michael Terpin offers a contrasting view, projecting 2026 as a down year with BTC potentially bottoming around $60,000 in the fourth quarter. Terpin highlighted the 2026 U.S. midterm elections as a significant risk factor, warning that anything short of Republican control of both congressional chambers could stall regulatory progress favorable to digital assets.

According to CME Group data, only 14.9% of investors currently expect a rate cut at January's Federal Open Market Committee meeting, down from 23% in November.