Grayscale: If the Federal Reserve pauses interest rate hikes, Bitcoin may see a price increase.

According to Mars Finance, on June 23, Zach Pandl, Head of Research at Grayscale, published an article stating that Bitcoin may see a rise if the Federal Reserve pauses interest rate hikes. Since the start of the Iran-Iraq War in late February, US stocks have risen 9%, Bitcoin has fallen 1%, and gold has fallen 20%. Although large-scale AI-related spending has supported the stock market, Bitcoin and gold have lagged behind, partly due to market expectations that the Federal Reserve may raise interest rates to combat inflation. Grayscale disagrees with this expectation, and its base case scenario is that the Federal Reserve will pause interest rate hikes. If this prediction is correct, Bitcoin's price may catch up with stock performance. Zach Pandl stated that since the start of the Iran-Iraq War, the one-year Federal Reserve interest rate expectation has risen by about 60 basis points, and about half of the Federal Reserve officials believe that a rate hike in 2026 may be appropriate. The European Central Bank has already raised interest rates. As monetary assets that do not generate interest, gold and Bitcoin compete with fiat currencies, and rising real interest rates on fiat currencies will increase the opportunity cost of holding Bitcoin and gold, thereby suppressing demand. Bitcoin serves a dual purpose in portfolios: as a scarce digital commodity that can act as a long-term store of value, and as a public blockchain asset that provides exposure to the long-term growth of the crypto industry. Therefore, Bitcoin functions similarly to, but not entirely equivalent to, gold and growth stocks in a portfolio. Zach Pandl suggests that if the likelihood of interest rate hikes decreases, consistent with Grayscale's baseline scenario, Bitcoin may catch up with stock performance.