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AI Boom Creates Fed Dilemma for Bitcoin

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The AI sector's massive $800 billion spending spree is reshaping inflation dynamics, creating a complex environment for the Fed. While AI has been a bullish trade for Wall Street, the Fed sees it as a potential inflationary force that could delay rate cuts. This shift in monetary policy expectations is increasingly weighing on Bitcoin and risk assets, as higher-for-longer rates reduce liquidity and speculative appetite. The market must now reconcile AI's productivity promise with its near-term inflationary impact, a tension that could keep crypto markets volatile.

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