This article discusses the recent fluctuations in Bitcoin prices, closely linked to inflation concerns and President Trump’s tariff threats. Bitcoin dropped in value after a peak, while traders foresee potential price booms due to changing Federal Reserve dynamics. Hayes predicts a favourable shift in U.S. monetary policy, while Trump’s impending tariffs generate market volatility with expectations of recovery ahead.
Bitcoin and other cryptocurrencies have seen a decline attributed to inflation concerns and U.S. President Donald Trump’s threats regarding tariffs. This follows a brief surge in Bitcoin’s price towards $90,000, forcing it back towards $80,000 despite market changes. Notably, Bitcoin’s performance has exceeded that of Elon Musk’s Tesla, sparking speculation of a potential boom in Bitcoin prices in April.
Arthur Hayes, a prominent crypto trader, indicated that recent changes in Federal Reserve Chair Jerome Powell’s approach could ignite a rise in Bitcoin’s value. He noted a pivotal shift in Powell’s tone during the last Federal Open Market Committee (FOMC) meeting, where interest rates were maintained after initiating a rate-cutting cycle. This situation occurs amid ongoing tensions with Trump, who advocates for immediate rate reductions to facilitate his trade tariff plans.
In a recent warning, Senator Elizabeth Warren stated that even the Federal Reserve Chair is not impervious to Trump’s influence, highlighting Trump’s capability to reshape government institutions rapidly. Powell, whose approach contrasts Trump’s demand for lower rates, seeks to carefully evaluate the economic landscape before making decisions.
With continued high interest rates stemming from inflation post-Covid stimulus, Trump pushed the Fed to reduce rates, linking them to his tariffs agenda. The FOMC recently adjusted its economic outlook, intensifying inflation forecasts while reducing its quantitative tightening initiative, a strategy affecting how the Fed manages its bond assets.
Hayes, recently pardoned for Bank Secrecy Act violations alongside BitMex co-founders, suggested the Fed might consider ‘stealth’ quantitative easing despite a soaring $36 trillion national debt. His remarks cited Powell’s assertion that tariff-related inflation may be temporary, indicating that Trump’s tariff changes may not significantly impact monetary policy, which supports cryptocurrency fluctuations.
Trump’s impending tariffs on goods from Canada, Mexico, and China, effective April 2, have caused unrest in various markets, including Bitcoin. Nonetheless, a rebound towards $90,000 is anticipated, as suggested by Markus Thielen, founder of 10x Research. He noted Trump’s recent flexibility regarding tariffs and expectations of a more dovish Fed could foster Bitcoin’s recovery, supported by Powell’s indications of overlooking immediate inflation pressures for long-term easing prospects.
