Bitcoin Surges Past $90,000 Amid Hopes of Reduced Tariffs and Rate Cuts
Bitcoin surpassed $90,000 on a surge of optimism following signs of possible tariff reductions by President Trump. The cryptocurrency’s rise is accompanied by concerns over a potential U.S. economic downturn due to trade wars. Analysts are cautiously optimistic about reduced interest rates as markets respond to macroeconomic indicators and expectations for monetary policy changes gather momentum.
On Wednesday, Bitcoin’s price exceeded $90,000, crossing a significant psychological threshold amidst anticipatory signs that U.S. President Donald Trump may reduce tariffs on Canada and Mexico, which could potentially alleviate economic concerns and influence the Federal Reserve’s decision on interest rates. Currently, Bitcoin is trading at approximately $89,700 and has gained 3% in the last 24 hours according to CoinGecko.
Noelle Acheson, a researcher, noted in her newsletter, “Crypto Is Macro Now,” that comments from Commerce Secretary Howard Lutnick regarding the negotiation of existing tariffs have heightened hopes for a less severe economic impact. This optimism comes after Bitcoin experienced a dip to $82,700 on Tuesday and below $79,000 last week, before rebounding following Trump’s announcement of a “strategic crypto reserve.”
The recent surge in Bitcoin’s price coincides with the upward movement of major equity indices, including a 1.2% rise in the S&P 500, as reported by Yahoo Finance. However, analysts remain cautious about the potential repercussions of a trade war on the U.S. economy, which is already showing signs of weakness.
Greg Magadini of Amberdata stated, “Like the rest of the equities market, we’re starting to price in the potential for a recession due to global trade slowing down.”
During his congressional address, President Trump acknowledged his trade policies might cause some disruption, commenting, “a little disturbance, but we’re okay with that.” As these tariffs affect the stock market, bonds have gained popularity, reflected in a decline in the 10-year Treasury yield from 4.42% to 4.23% over the past month.
Economic analysts are now closely monitoring growth indicators, with the Federal Reserve Bank of Atlanta projecting a 2.8% contraction in the U.S. economy for the first quarter. Additionally, tech billionaire Elon Musk’s government job reductions further exacerbate growth apprehensions, as government contributions to economic growth diminish.
The growing instability in the crypto market aligns with delays in regulatory developments affecting cryptocurrencies. Although Fed futures traders were previously pessimistic about rate cuts, recent tariff movements have encouraged optimism, with expectations rising for as many as three cuts in interest rates this year, according to CME FedWatch.
The surge in Bitcoin’s value, crossing $90,000, has been facilitated by hopes of reduced tariffs and potential interest rate cuts amid economic uncertainty. Factors such as trade policies and macroeconomic forecasts significantly impact market sentiment, highlighting the intricate relationship between traditional finance and cryptocurrencies. As analysts remain vigilant about potential recessions, these dynamics are critical in shaping the future of Bitcoin and other digital assets.
Original Source: decrypt.co
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