Bitcoin Price Stabilises Amid Economic Uncertainty and Tariff Discussions

Bitcoin’s price stabilised near $84,000 amidst tariff discussions; Trump’s trade war raises economic concerns, with the potential for rising consumer costs. Wall Street showed minimal movement. Analysts predict potential stagflation effects from tariffs while exploring how they might influence Fed interest rate decisions. The U.S. Strategic Bitcoin Reserve may be funded through tariff revenue, but Bitcoin’s value remains below $90,000.

On Tuesday, Bitcoin’s price was relatively stable, trading around $84,000, with minimal volatility observed from the White House’s updates on tariffs. White House Press Secretary Karline Leavitt indicated that the administration is considering relief measures for farmers affected by President Trump’s trade strategies while engaging with 15 nations to negotiate new trade agreements.

According to CoinGecko, Bitcoin experienced a slight drop of 0.6%, trading at approximately $84,300, while Ethereum decreased by 1.8% to $1,600, and Solana fell by 1.6% to $128. Wall Street mirrored this calm, with the S&P 500 declining by 0.02%, Nasdaq rising 0.07%, and the Dow down by 0.2% as per Yahoo Finance.

This month, President Trump introduced “reciprocal” tariffs affecting over 180 countries, particularly targeting China. Despite a reduction in tariffs to 10% for most nations, concerns persist regarding the potential negative impact on the U.S. economy, especially considering the Consumer Price Index showed a lower-than-expected increase of 2.4% over the past year.

Economists warn that Trump’s tariffs may elevate consumer costs and restrain economic growth, aligning with Yardeni Research’s assertion that inflationary effects might be overestimated while the risks to growth could be underrated. This suggests a potential balance, or counterbalance, between both effects.

In relation to cryptocurrency, a podcast featuring Bo Hines from the Presidential Council of Advisers on Digital Assets revealed plans to augment the U.S. Strategic Bitcoin Reserve, potentially funded by tariff revenue. Following the promised Bitcoin reserve launch earlier in the year, Bitcoin has not surpassed the $90,000 mark in nearly a month.

Investors are keen to determine how tariffs may affect the Federal Reserve’s interest rate strategy, especially following last month’s predictions of two rate cuts. Raphael Bostic, the Atlanta Fed president, expressed uncertainty, stating the economic outlook remains complex and challenging, noting the significant pause in the economy.