Bitcoin surged past $93,000 due to easing U.S.-China trade tensions and shifting monetary signals from the Trump administration. Gold’s volatility suggests a potential capital shift toward digital assets, with the M2 money supply growth being a significant driver for both assets. McMillin from Merkle Tree Capital comments on the historical correlation between gold and Bitcoin prices, indicating that ongoing economic negotiations will be key for future movements.
Bitcoin experienced a notable surge, briefly crossing $93,000 on Tuesday, driven by easing U.S.-China trade tensions and a softer approach from President Trump regarding Federal Reserve leadership. This increase highlights a growing investor appetite for riskier assets, reflecting positive sentiment across equities and commodities. Additionally, gold exhibited volatility, spiking to $3,500 before settling at $3,300, which some analysts interpret as indicative of capital flowing toward digital assets.
The movement in Bitcoin aligns with broader macroeconomic trends, primarily influenced by M2 money supply growth. According to Ryan McMillin from Merkle Tree Capital, Bitcoin typically lags gold’s immediate price reactions by about 90 days. Historically, significant gains in gold often foreshadow upcoming rallies in Bitcoin. This relationship suggests a rotational dynamic among investors between these two assets, particularly amid rising expectations of inflation and monetary expansion.
McMillin articulated that ongoing global trade tensions mean that governments are likely to leverage monetary policy that could lead to heightened M2 supply, which is conducive to price increases for both gold and Bitcoin. With the Federal Reserve’s upcoming interest rate assessments and negotiations between the U.S. and China acting as critical market drivers, Bitcoin’s trajectory remains closely monitored.
Despite this price rally, caution persists among some traders, citing historically elevated funding rates and a decline in on-chain activity as potential obstacles for sustained growth. Nonetheless, the current macroeconomic landscape seems to favour Bitcoin, at least for the foreseeable future.
