Money printing has long been a tailwind for risk assets, and Bitcoin could benefit from a new wave of liquidity in 2026. However, political uncertainty tied to the US midterm elections may complicate the outlook.
Bitcoin’s price could climb next year as looser monetary policy injects “massive” liquidity into financial markets, according to Bill Barhydt, CEO of crypto exchange and wallet provider Abra.
Speaking on the Schwab Network, Barhydt said he expects the US Federal Reserve to continue cutting interest rates in 2026, potentially restarting forms of quantitative easing. That shift, he said, would likely support risk-on assets such as Bitcoin.
“We’re already seeing a lighter version of quantitative easing,” Barhydt said, pointing to the Fed’s recent bond purchases. “Demand for government debt could fall next year as rates decline, and that environment is generally positive for all assets, including Bitcoin.”
Barhydt also cited improving regulatory clarity in the US and growing institutional participation as factors that could support Bitcoin and the broader crypto market over the next several years.
Still, expectations for near-term rate cuts remain muted. Data from CME Group shows that only 14.9% of investors expect an interest rate cut at the Federal Open Market Committee’s January meeting, down from 23% in November.
Not everyone agrees with the bullish outlook. Some early Bitcoin investors and market analysts argue that 2026 could be another weak year for BTC, with prices potentially trending lower for an extended period.
Early Bitcoin investor Michael Terpin said he believes Bitcoin could bottom around $60,000 in the fourth quarter of 2026. While a new Federal Reserve chair may push for lower rates, Terpin warned that political developments could offset those benefits.
“Anything short of a Republican sweep in the midterms could hurt the current push for crypto-friendly regulation,” he said.
Prediction market data currently shows low odds of a single party controlling both chambers of Congress after the 2026 midterm elections. Historically, control of Congress often shifts during midterm cycles, adding another layer of uncertainty for markets.
Featured image from: cointelegraph.com