Bitcoin and cryptocurrency prices are rising again in early 2026, as traders bet on a major policy shift from the U.S. Federal Reserve that could drive prices much higher.
Earlier this week, bitcoin surged close to $95,000 before pulling back sharply, as markets reacted to a $17.3 trillion geopolitical shock that briefly rattled investors.
Despite the volatility, a new market mantra—“Run it hot”—is gaining traction among traders. The phrase reflects expectations that U.S. economic policy will prioritize growth, stimulus and easier financial conditions.
President Donald Trump has increased pressure on the Federal Reserve to cut interest rates aggressively, while signaling support for policies that could boost asset prices. Trump is expected to replace Fed Chair Jerome Powell in May, potentially installing a more crypto-friendly leader.
Analysts say the Fed could go beyond rate cuts and return to asset purchases, similar to quantitative easing, which would increase liquidity in financial markets. Trump has already proposed a $200 billion mortgage bond-buying program to lower borrowing costs.
Market strategist Ben Hunt and economist Mohamed El-Erian have both warned that political pressure on the Fed could reshape monetary policy in 2026.
Prominent bitcoin trader Arthur Hayes has openly backed the “run it hot” theory, predicting bitcoin could reach $200,000 in early 2026, and even higher if stimulus expands.
Although bitcoin remains below its October 2025 peak of $126,000, traders believe a shift toward looser monetary policy could act as a major price catalyst in the months ahead.
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