Markets are entering 2026 with purpose. Risk is back on the menu across the board—equities, precious metals, crypto, and even the dollar. Flush liquidity, stabilizing inflation, and resilient services data are laying the groundwork for a “Goldilocks” start to the year.
But under the surface, this is a politically charged rally. With mid-terms approaching, the Trump administration appears determined to engineer new highs across asset classes. From foreign policy posturing in Venezuela and Iran, to mortgage agency interventions, and now the Fed’s increasingly politicized environment- this is fiscal dominance in action.
BTC, for its part, has lagged behind the rally in equities and metals. But that may now be changing. The breakout above USD 95,000 this week could mark a shift in tone, especially as crypto begins to reprice against growing fiat debasement and political risk.
Macro: Risk Returns, Politics Drives
It is rare to start the year with so many moving parts-yet so much consensus.
Despite recent geopolitical headlines, including US involvement in Venezuela and tension surrounding Iran, markets have not flinched. If anything, they have leaned further into the idea of US reasserting dominance-both economically and geopolitically.
That belief is now being backed by action:
- The Fed continues USD 40 billion/month in T-bill purchases
- Treasury issuance remains skewed to the short end
- New SLR changes are pushing banks toward longer-duration Treasury purchases
- USD 200 billion MBS purchase program through Fannie and Freddie, aimed at lowering mortgage rates and juicing housing
It is QE in all but name- with the Treasury effectively calling the shots. With Fed independence now visibly under scrutiny, it is hard to argue this is not fiscal dominance at work.
Crypto: BTC Finally Joins the Party
After trailing the broader risk rally through year-end, BTC has finally stirred. Having spent much of Q4 capped around USD 95,000, BTC pushed decisively towards USD 97,000 (+5% on the week) this week, regaining momentum as macro tailwinds align.
What’s changed?
- Liquidity is back – US financial conditions are easing, and Fed balance sheet expansion is underway
- Profit taking from longterm holders appears to be slowing, suggesting that much of the earlier distribution from “OG” holders may now be behind us.
- Relative value is emerging –BTC looks comparatively under-owned compared to precious metals
In a regime increasingly defined by fiat debasement, liquidity injections, and politicized central banking, it is hard to imagine BTC not eventually catching up with USD 100,000 psychological level now firmly in sight.
Looking Ahead: Tails Risks or Tailwinds?
The path ahead for risk assets feels asymmetric. Markets are climbing despite geopolitical risks, not because they have disappeared-but because they’re being repriced through the lens of stimulus, not shock.
Unless something truly disruptive emerges or there is a broader change in the current narrative, the bar for derailing this rally remains high.
In that environment, it feels less like a question of if we retest USD 100,000-and more like when.
Read more News here.
Investments in virtual currencies are high-risk investments with the risk of total loss of the investment and you should not invest in virtual currencies unless you understand the risks involved with such investments. No information provided in this article or any attachments shall constitute investment advice. Crypto Finance AG excludes its liability for any losses arising from the use of, or reliance on, information provided in this article or any attachments.