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Bitcoin veteran Mark Moss predicts significant volatility ahead for the cryptocurrency market, forecasting a potential peak of $175,000 for Bitcoin by 2026 while warning of possible crash scenarios that could drive prices down to the $55,000-$60,000 range. Moss attributes the expected volatility to a combination of Federal Reserve policy shifts, political tensions, and the structural inevitability of continued money printing in the debt-based monetary system.
Key Points
- Bitcoin could peak at $175,000 in 2026 based on expected liquidity injections and Fed policy changes
- Worst-case scenarios could see Bitcoin drop to $55,000-$60,000, representing a potential 70% drawdown from current highs
- The Fed switched from quantitative tightening to easing on December 1st, now purchasing $40 billion monthly in assets
- Political tensions, including what some call a "color revolution," could derail bullish market scenarios
- Bitcoin's 50% compound annual growth rate comes with equivalent downside volatility risk
Fed Policy Shift Signals Market Turning Point
The Federal Reserve's recent policy reversal marks a crucial inflection point for Bitcoin and broader markets. After implementing the fastest rate hiking cycle in history since November 2021, the Fed officially switched to quantitative easing on December 1st, 2025.
We went from this in 2021, 2020, we had the crash. The Fed started injecting trillion, tens of trillions of dollars into the markets and the economy. They started raising rates. They went under the fastest rate hiking cycle in history, which made money more expensive. So people bought less of it.
The central bank now purchases $40 billion monthly in assets, a figure Moss expects to accelerate. This liquidity injection typically takes three to four months to flow through the financial system, suggesting potential market rallies could begin in Q1 or Q2 2026.
Jerome Powell's tenure as Fed Chair ends in May 2026, with expectations that President Trump will install a more dovish replacement committed to achieving the administration's target of 1% interest rates.
Political Risks Could Derail Bull Market Thesis
Despite bullish liquidity projections, Moss identifies significant political headwinds that could invalidate his optimistic scenario. He points to what General Mike Flynn has characterized as a "color revolution" within the U.S. government, along with actions by what he terms the "Seditious Six" - lawmakers allegedly instructing military personnel to resist Trump administration directives.
Historically, when markets are good, people get reelected. When markets are bad, a regime change happens. If this color revolution is real, if you have these seditious six and they really have some power, then they would like to swing the midterms back to the opposing party. And one big tool that they would have that they could use would be to try to keep the markets down, crush the economy.
This political interference could disrupt the administration's plans for lower interest rates and increased liquidity, potentially triggering the severe downside scenarios Moss outlined.
Bitcoin Supply and Demand Dynamics
With approximately 450 Bitcoin mined daily, or roughly 164,000 annually, Moss remains confident about sustained demand. While Bitcoin treasury companies have slowed purchases due to compressed margins and valuations below net asset value, he expects renewed institutional buying once Bitcoin breaks into new all-time high territory.
Exchange-traded funds continue driving institutional adoption, with BlackRock recommending 5% Bitcoin allocations. Major financial firms like Charles Schwab are rolling out Bitcoin products, expanding access for pension funds, 401(k) plans, and other institutional capital previously unable to invest directly in commodities.
Long-Term Outlook Despite Volatility
Moss emphasizes Bitcoin's classification as a "50 V asset" - capable of 50% annual gains but equally prone to 50% drawdowns. This volatility reflects Bitcoin's approximately five-times sensitivity to liquidity changes compared to traditional assets like gold.
The fundamental driver remains the debt-based monetary system's structural requirement for continuous expansion. As Moss explains, money creation through debt issuance creates a Ponzi-like structure demanding perpetual growth, making money printing as inevitable as "death and taxes."
We're in a debt-based monetary system. What that means is that money is created through debt issuance. That debt has to continue to grow. It can't go the other way. As the economy gets worse, that just means more money printing to fill in the gap is coming.
Looking toward 2026, Moss anticipates continued AI infrastructure development and the beginning of actual re-industrialization in the United States, including rare earth mining and domestic refining operations. However, he advises investors to structure portfolios based on time horizons, keeping only funds not needed for at least four years in Bitcoin to avoid forced selling during volatile periods.
