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Bitcoin’s price fell by more than 1.6% today as investors await the Federal Reserve’s decision on interest rates. Analysts are divided on whether the rates will remain unchanged or if a “slightly dovish surprise” could provide a short-term boost to Bitcoin, as 10x Research predicts. Standard Chartered Bank analyst Geoffrey Kendrick suggested that if the Fed maintains a neutral stance, Bitcoin could return to $105,000 in the coming days.

China’s DeepSeek AI has also drawn attention this week. Unlike major firms that spend billions developing AI models, DeepSeek reportedly achieved comparable results for just $5 million. Standard Chartered noted that the lower cost of AI could help reduce inflation, which may benefit assets like Bitcoin. Kendrick emphasized that DeepSeek’s emergence is not a direct threat to Bitcoin but instead could support its long-term growth.

Meanwhile, regulatory shifts in the U.S. could further shape the cryptocurrency market. The Securities and Exchange Commission (SEC) recently rescinded Staff Accounting Bulletin No. 121, a rule that had previously required companies holding crypto assets to record them as liabilities. SEC Commissioner Hester Peirce, a critic of the rule, is now leading a new crypto task force, signaling a shift in the agency’s approach to digital assets. The rule’s removal is expected to encourage more institutional participation in Bitcoin.

Institutional interest in Bitcoin has already been increasing. Bitcoin ETFs have seen net inflows of $38 billion in just over a year, while pension funds currently hold only 1% of this value. Kendrick believes that the long-only investment sector, which manages assets worth $40 trillion, will expand into Bitcoin in 2025, pushing inflows higher than last year.

Internationally, central banks are also considering including Bitcoin in their reserves. Czech National Bank Governor Aleš Michl is set to propose adding up to $7 billion in Bitcoin to the country’s holdings. If approved, the Czech Republic would be the first Western nation to include Bitcoin in its central bank reserves. Michl cited diversification as a key reason for the move.

Despite short-term fluctuations, some analysts remain optimistic about Bitcoin’s future. CryptoMondays founder Lou Kerner pointed out that Bitcoin’s scarcity and increasing global demand continue to drive its value. He noted that while short-term market shocks, such as DeepSeek’s emergence or potential U.S. trade tariffs under the Trump administration, may affect prices temporarily, the long-term outlook remains strong. Kendrick also suggested that economic uncertainty could push more investors toward Bitcoin as a store of value.

With major financial, regulatory, and institutional developments unfolding, Bitcoin remains at the center of market discussions, balancing short-term volatility with long-term potential.