Analyst: Federal Reserve rate cuts and a weakening dollar may drive Bitcoin's rise by 2026

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On December 31, Forbes reported that analysts predict that the Federal Reserve will cut interest rates in 2026 and the continued weakening of the US dollar will drive Bitcoin prices higher. Data shows that the US dollar declined nearly 10% in 2025, marking the largest annual drop since 2017. ING Chief International Economist James Knightley stated that the Federal Reserve is still in an easing mode. Additionally, Polymarket predicts a 96% chance of rate cuts before June next year; Trump indicated the possibility of replacing Federal Reserve Chair Powell in January to further lower the current interest rate level of 3.5%-3.75%. Experts from Unchained and Clear Street believe that monetary policy easing will make Bitcoin the main beneficiary of dollar depreciation, becoming a key driver of growth in the crypto market in 2026.

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