FED Policy Is Hurting Bitcoin, Warns Economist Timothy Peterson

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Economist Timothy Peterson believes Bitcoin’s price is being held back by poor decisions from the U.S. Federal Reserve.

In a recent post on X, Peterson said the Fed has made a big mistake by tightening monetary policy too much. According to him, this move is hurting the U.S. economy—and stopping Bitcoin from reaching its true potential.

Is the Fed Making the Economy Worse?

Peterson explained that the Fed has reduced the money supply too aggressively, which is now causing deflation. He pointed out that falling prices, lower spending, and slowing growth are signs that the economy is weakening—not strengthening.

“The Fed still doesn’t realize the real issue is its own policy,” Peterson wrote.

He believes the U.S. economy is shrinking because there isn’t enough money circulating. This situation makes it harder for both businesses and consumers to thrive.

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Real Struggles Behind Good-Looking Stats

While the unemployment rate is just 4.2%, a recent LendingTree survey shows that more than 25% of Americans are using Buy Now, Pay Later (BNPL) loans to buy groceries—up from 14% last year. Peterson says this is proof that many people are struggling, even if the job numbers look good.

Bitcoin’s Growth Being Held Back?

Peterson claims that Bitcoin could be 30% to 50% higher today if the Fed had managed a proper “soft landing” for the economy. Instead, the current policies are limiting its price growth.

He warned that both the economy and crypto market could feel the effects of these policy mistakes for years. Investors, he says, should be cautious and make selective decisions moving forward.