Timothy Peterson Blames Fed's Tight Monetary Policy for Stalling Bitcoin's Price Growth by Up to 50%

Despite low unemployment, rising BNPL grocery purchases signal deeper economic stress, says Peterson.

Economist Timothy Peterson has put the blame on the U.S. Federal Reserve for holding Bitcoin (BTC) at lower prices than it could have reached.

In a recent post on X, formerly Twitter, Peterson stated that the Fed's poor decisions and handling of the economy have ultimately limited Bitcoin's gains.

"The Fed made a big mistake by tightening monetary policy too much and reducing the money supply too quickly. This move is now causing deflation, which reduces spending, slows growth, and makes it harder for businesses and consumers to thrive."

According to Peterson, the optimistic view is that the U.S. economy is quickly recovering from the pandemic thanks to a low unemployment rate of 4.2%. However, a recent LendingTree survey shows that over 25% of Americans are using Buy Now, Pay Later (BNPL) loans to buy groceries—a significant increase from 14% last year.

This statistic, says Peterson, is a better indicator of the economic stress people are facing. He adds that if the Fed had managed a proper “soft landing” for the economy, Bitcoin's price would be 30% to 50% higher today.

"We are now experiencing the effects of these policy blunders, both in the broader economy and in the crypto markets. Investors should be mindful and make selective decisions as we navigate these uncharted waters."