Bitunix analyst: Bitcoin’s price depends on Fed and ETF flow.

After a week of increasing volatility and policy speculation, I spoke to Dean Chen, an Analyst at Bitunix. In our conversation, we talked about key macroeconomic developments and the crypto markets.

Private payrolls in the U.S. are growing. missing expectations Chen shared thoughtful insight into the impact of these dynamic on Bitcoin.BTC) and other digital assets. Chen described how, as the markets examine the prospects of a Fed pivot in light of rising risks for recession and the potential impact on the crypto market.

Ethereum (also) played a role in the economic crisis.ETHHow to explain the current institutional crypto rally and its relative performance.

Chen breaks down the factors that support bullish BTC predictions, discusses the value of crypto-ETFs and the differences between traditional and direct assets.

Chen’s analyses helps to clarify the situation as Washington regulatory pressure builds and stablecoins are backed by state governments. Bitunix Market participants and institutions are gearing up for an era marked by institutional clarity and integration.

Below is the full Q&A with Dean Chen.

Note from the Editor: The interview took place before the publication of the U.S. Non-Farm Payrolls Report, which is the subject of the first question.

Crypto.news: US employment market shows signs of cooling. Private payrolls increased just 37,000 in may, compared to 110,000 anticipated (a 2-year low). The weakness of the US labor market has even led President Donald Trump, U.S. to call for another rate cut. What impact will the non-farm payrolls data this Friday have on Bitcoin, and the wider crypto market in general? Could a weaker jobs report be the catalyst that drives crypto, on the hope of a Fed pivot earlier? Or could this spook investors and hurt crypto assets in the short-term?

Dean Chen: The data showing weakness could cause a temporary rise in market expectations that the Fed will cut rates sooner than expected. Lower interest rates usually increase liquidity as well as the appeal for risky assets. This would lead to a spike in crypto prices.

A lack of quality data may also raise concerns over the health of the entire economy. This could signal the possibility that a recession is imminent, and investors will be prompted to switch their investments towards safer assets. The market’s reaction may be mixed. As a result, the markets could react in varying ways. “Fed pivot” Crypto prices may rise as a result of a dominant sentiment.

Trump says the U.S. Economy is in trouble “downward spiral”Rate cuts are being pushed for immediately. At least one Fed interest rate cut is already being priced into the markets by September. What do you predict Bitcoin’s behavior to be if we slip into recession? Will it behave more like digital silver (rallying in a secure haven), or will it fall alongside stocks and other high-risk assets? The crypto market fell during the 2022 recession fears, despite high inflation. “inflation hedge” thesis. Bitcoin has yet to prove itself as an asset that is recession resistant, but its fate remains tied to the economic growth.

DC: Bitcoin is more of a risky asset rather than a haven. “digital gold” During economic downturns. Crypto assets plunged sharply in 2022, even with high inflation. The narrative that Bitcoin is an investment has been challenged. “inflation hedge.”

Bitcoin’s price fluctuations are strongly linked to global liquidity. Investor risk appetite and economic growth. Investors tend to turn towards cash and traditional safe assets such as gold or the U.S. Dollar during times of recession, instead of high-volatility Bitcoin. This indicates that Bitcoin has not yet proven itself to be a recession resistant asset.

Some market analysts have made extremely bullish predictions that Bitcoin will reach $200,000 before the end of this year. Tom Lee of Fundstrat goes up even further (although it always appeared that he was an anomaly) to $250,000, due to increased liquidity and the squeeze after the halving of supply. Do you think these goals are optimistic? What would be the fundamental factors that need to manifest to support Bitcoin reaching $150,000+?

DC: A Bitcoin price of $200,000. or $250,000 at the year’s end is exciting. However, we must evaluate this target with caution. In order to achieve a bitcoin price of more than $150,000, a number of fundamental factors need to align.

First, sustained institutional inflows—especially consistent net inflows into spot Bitcoin ETFs—are crucial to support prices. The second reason is that a shift by central banks to monetary easing will inject liquidity in the market, which would favor Bitcoin and other risky assets. The post-halving squeeze in supply, when matched with stable or rising demand, will further boost prices.

A macroeconomic context is also crucial. A “soft landing” scenario—where inflation is under control, economic growth slows, and the Fed cuts rates without triggering a recession—would be ideal for Bitcoin. To attract more capital, the crypto market would need clear regulations and a focus on innovation in large economies.

Lastly, technological advancements within the Bitcoin network and broader crypto ecosystem—such as greater adoption of the Lightning Network and the growth of DeFi applications—will increase Bitcoin’s utility and long-term value. The outlook, while optimistic, should not be viewed as a cause for elation.

CN: While Bitcoin is still within striking distance of its all-time highs, Ethereum is still 40–50% below its record peak. Ethereum is still down by 23% despite the crypto-recovery. What do you believe is the reason why ETH underperformed BTC during this cycle? Ethereum is lagging, but there are other factors that could be affecting its gains. These include regulatory issues, concerns over ETH as a financial instrument, and competition with other L1s/L2s. What’s your view on ETH’s future, given that Ethereum is still upgrading its network?

DC: Bitcoin being the biggest and most liquid crypto, it is usually what attracts first capital during upswings in markets and also serves as an asset to be traded. “market indicator.” Ethereum can often be behind Bitcoin, but catches on later when the Bitcoin momentum has established itself.

After Ethereum’s Merge, and the transition to a Proof of Stake model, a significant amount of ETH was staked. This reduced circulating supply, and limited price flexibility temporarily. This likely caused some speculative money to move into assets that have higher short-term returns.

In the US, the uncertainty about whether ETH is classified as a securities by the SEC of the United States has suppressed demand from institutions. The competition is also a factor. Users and developers are attracted to other Layer 1 and Layer 2 solutions, such as Arbitrum and Optimism. These offer lower prices and higher performance.

Ethereum has a strong long-term future despite these challenges. As a result of its ongoing improvements, Layer 2 transaction fees are being reduced and the scalability is increasing. This increases Ethereum’s network utility. Ethereum continues to be the core of DeFis and NFTs. It is supported by a lively developer ecosystem. The demand for ETH will increase as the markets recover.

Summary: Ethereum’s long-term potential is supported by the technical innovations, robust ecosystem and increasing scalability. If bullish sentiment continues, ETH might eventually follow BTC to new highs.

There are now a number of cryptocurrency ETFs available, including one with a Trump logo. “Truth Social Bitcoin ETF”. In what way do you see the recent Bitcoin rally being driven more by institutional investors, who have allocated through ETFs and similar vehicles than retail traders. Are you concerned that institutional adoption will reach a tipping-point and fundamentally change market dynamics?

DC: Institutional investors have been the main drivers of recent Bitcoin rallies, not retail traders. The institutional adoption of Bitcoin is approaching an inflection-point. Bitcoin is increasingly being incorporated into the portfolios and balance sheets of corporates, hedge funds, traditional asset managers.

The institutional capital helps to stabilize the market and also boosts Bitcoin as an asset. The market has undergone a major shift, and this is laying the foundations for long-term sustainable growth.

How do relative risks, returns, and correlations to the asset compare?

DC: Investors who prioritize true ownership, maximum control, and participation in on-chain ecosystems—and who are comfortable with the responsibility of self-custody—typically prefer direct ownership. On the contrary, investors who want to gain exposure via familiar, well-regulated, traditional financial instruments but prefer simplicity of operation may choose ETFs or stocks.

Both methods have their own advantages and disadvantages. Direct ownership allows for greater centralization and autonomy, but also involves a higher level of complexity and risk. While ETFs offer regulatory protection and convenience, they may have tracking errors or lack the full functionality of underlying digital assets.

After many years of unclarity and enforcement driven policy, there are finally signs that the U.S. has begun to move towards a clearer regulatory framework for crypto. The bipartisan Digital Asset Market Clarity Act of 2030 was introduced by lawmakers in late May. It would divide oversight between SEC and CFTC while also providing safe harbors for DeFi protocol. Paul Atkins, who is the new chairman of the SEC told Congress that he would pursue a number of initiatives. “notice-and-comment” Rulemaking is not just about lawsuits. “clear rules of the road” For crypto assets. Are you optimistic that regulatory clarity will be achieved in the near-future? What impact will it have on Bitunix and other firms if comprehensive legislation such as the CLARITY act is passed and the SEC moves to formal rulemaking? Do investors have a realistic expectation of a more favourable regulatory climate under the current Administration, or should they wait until new laws and rules are implemented before changing their minds?

DC: I’m cautiously hopeful that we will see meaningful regulatory clarity within the U.S. soon. Digital Asset Market Clarity Act of 2020 and the new SEC policy under Paul Atkins are both strong steps in a direction of a clearer regulatory framework. It would also be important for protecting consumers, encouraging innovation and attracting institutional investment.

However, the challenges still remain. The complexity of the legislation and differing stakeholder interests could slow down progress.

The legislation is beneficial for Bitunix and other platforms. This legislation would bring legal certainty to digital asset trading and allow for planning on a long-term basis. The clear regulations could also draw in more traditional financial players, speeding up market growth and ecosystem developments.

The initial cost of complying with the new regulations may increase, but this will eventually improve competitiveness and create trust. Bitunix will gain more credibility and trust in the market if they are regulated transparently and strictly.
Even though the expectations for more tolerant regulation continue to grow, caution remains warranted. Markets can fully value the impact of a legal framework that is clear, enforceable and in force.

Stablecoins are still a major player in the crypto market, but now they have entered mainstream finance. Circle, for example, has filed to go public on the NYSE with a target valuation of around $6 billion. New experiments also emerge: Wyoming’s launch of a 100% fiat-backed fully-reserved state-issued note. “Wyoming Stable Token” The first US stablecoin was issued in July. What are the implications of these recent developments for stablecoins’ future? Circle’s public listing indicates that stablecoin providers, who are regulated and able to integrate with the traditional market will be as prevalent as banks. Can a stablecoin linked to a central or state bank (either a token such as WYST, or perhaps a Fed CBDC later on) compete against private coins such as USDC or Tether? Tether remains the most popular stablecoin. Are you concerned about USDT dominance in an increasingly regulated world, or do you expect it to continue to flourish despite its perennial concerns over transparency?

DC Stablecoins have a growing role to play in mainstream finance and crypto markets, and they are destined to become the foundational technology for payments and settlements worldwide. Circle’s IPO demonstrates how Wall Street is now taking regulated stablecoin holders seriously. This will accelerate the convergence of traditional and crypto finance. In the coming years, mainstream adoption will be driven by regulatory compliance and legitimacy.

Government- or central bank-issued stablecoins—like WYST or a future Fed CBDC—have sovereign trust advantages and benefit from regulatory clarity, making them easier to integrate into existing financial systems. The private stablecoins USDC and USDT face increased competition as a result. Private issuers must improve reserve transparency, and offer innovative services to remain competitive. This includes blockchain native applications, cross-border payment, and innovations in service.

If Tether doesn’t deal with transparency issues, it could face regulatory risk. USDT, in an increasingly regulated world, will need to either adjust reserve practices or shift its focus to markets where there is less oversight.