Federal Reserve's Gradual Money Printing to Influence Asset Prices

The U.S. Federal Reserve is set to embark on a gradual approach to money printing, which is expected to mildly stimulate asset prices, according to economist and Bitcoin advocate Lyn Alden. According to Cointelegraph, Alden suggests that this strategy will not be as significant as the large-scale money printing anticipated by many in the Bitcoin community. In her February 8 investment strategy newsletter, Alden stated that her expectations align with the Federal Reserve's plans to expand its balance sheet at a pace similar to the growth of total bank assets or nominal GDP. She emphasized the importance of owning high-quality scarce assets while rebalancing away from overly euphoric areas towards under-owned sectors. U.S. President Donald Trump's nomination of Kevin Warsh as the next Federal Reserve Chairman has stirred reactions among market traders, who view Warsh as more hawkish on interest rates compared to other potential candidates. Interest rate policies have a significant impact on cryptocurrency prices, as expanding credit through increased money supply is generally seen as favorable for assets, while a contraction through higher interest rates can lead to economic slowdowns and lower prices. The upcoming Federal Open Market Committee (FOMC) meeting in March is not expected to result in an interest rate cut, with only 19.9% of traders anticipating such a move, down from 23% earlier. Current Federal Reserve Chairman Jerome Powell has provided mixed guidance on interest rate policies, despite having reduced rates multiple times in 2025. Powell highlighted the challenges of balancing inflation risks, which are tilted to the upside, against employment risks, which are on the downside. His term as chairman ends in May 2025, and Warsh's confirmation by the U.S. Senate remains pending, adding to investor uncertainty regarding interest rate policies in 2026.