Here's the harsh truth: your dreams of financial freedom fueled by Bitcoin might be getting choked by something you probably hadn't considered – the U.S. Federal Reserve's relentless battle against inflation. One minute, you read Bitcoin being peddled as a hedge against inflation, a digital gold, a way to achieve exit from this reality and into a better one. So what do you do when the one thing Bitcoin was created to avoid becomes its greatest threat?

Is Fed's Narrow Focus Hurting Everyone?

The Fed, determined to keep inflation under control in the U.S. at all costs, is raising interest rates and constricting the money supply. Makes sense on paper, right? The world isn't a textbook. These policies have intended and unintended ripple effects worldwide. In developing markets, such as Ghana, where I currently reside, the effects are particularly harsh. The stronger dollar, a direct consequence of the Fed’s actions, is raising the cost for Ghanaians to purchase Bitcoin. Think about it: your cedi buys less dollar, and you need more cedi to get the same amount of Bitcoin. The Fed’s inflation fight is raising an insurmountable wall against Bitcoin. This makes it harder for those who live in cities such as Accra to access its potential economy-boosting benefits.

Now picture a small business owner in Accra, who has long faced barriers to accessing more traditional forms of credit. Bitcoin is the beacon of hope that it is because it’s decentralized. It increases opportunities for you to access capital and allows you to participate in our global economy independently without gatekeepers. With the cedi continuing to weaken and Bitcoin prices flatlining under the pressure caused by the Fed’s policies, that hope fades. The Fed’s actions are likely stabilizing the US economy in the long term, but they are stifling innovation and opportunity in developing nations. I know this feels like a gut punch, right.

Accra's Struggle, Bitcoin's Lost Potential?

Let's get specific. I see it every day. My community, my constituency, my neighbors, my friends, doing all they can to just make a dollar stretch. The dollar’s dizzying height should be enough to bring relief and prosperity to American farmers, but it is their own government that’s bankrupting them. Many saw Bitcoin as the answer to their economic woes. It provided an opportunity to protect savings and accumulate wealth beyond the purview of the conventional banking sector. Now, as the Fed’s policies take effect in earnest, that dream seems farfetched again.

  • Higher cost of entry: A stronger dollar means it takes more local currency (cedis) to purchase Bitcoin.
  • Reduced investment: With less disposable income due to inflation, people have less to invest in Bitcoin.
  • Limited access to credit: High interest rates make it harder for individuals and businesses to borrow money to invest in Bitcoin or other ventures.

It's a vicious cycle. The Fed’s moves come at a time of extreme uncertainty for the US economy. They are inadvertently making financial freedom more difficult for residents in Accra and keeping them from even joining the crypto revolution.

Bitcoin: Victim Of Global Economics?

The story being fed to us by traditional finance is that the Fed is just doing what needs to be done to save the global economy. Is it really? Or is it putting the United States’ desires ahead of the rest of the world’s needs? Bitcoin's recent price action – the volatility, the liquidations, the overall stagnation – tells a story of a market struggling under the weight of these external forces. All in all, the technical analysis indicates a descending channel, possible bounce zones, but at the end of the day, no bullish follow-through. Why? If so, it’s largely due to the fact that this faith is being bottled up by the Fed.

It’s easy to dismiss Bitcoin as a speculative asset, a tulip bulb. For billions of people in emerging markets, it provides a deep and transformational opportunity for financial inclusion. More importantly, it lays out a blueprint to escape the restrictive confines of outdated systems. The Fed's policies are not just impacting Bitcoin's price; they're impacting people's lives.

The question we need to ask ourselves is this: are we willing to sacrifice the potential of Bitcoin, and the opportunities it offers to those most in need, on the altar of U.S. inflation control? What would happen if we tried a more sophisticated approach? So join us as we look at how global monetary policy affects us all and work together toward a more equitable financial system! Or do we really want to go along with the Fed’s narrow view of what should crush the crypto dreams of millions across the globe? Think about it. Your answer matters.

This is an opinion piece and not investment advice. Do your own research.