Bitcoin’s price surged over $100K amidst rising rate cut expectations, driven by institutional demand and a U.S.-U.K. trade deal. Despite the Federal Reserve’s unchanged rate, markets anticipate cuts, projecting a 70% chance in July. Optimism across altcoins, with Ethereum up 20%, while gold dipped. Experts remain cautious and stress the need for sustained movement above $100K for lasting momentum.
Bitcoin’s price surged on Thursday, showing notable gains alongside many altcoins and equity markets. A likely factor here is the growing anticipation of interest rate cuts in the US. Interestingly, all of this is happening despite the Federal Reserve’s decision earlier in the week to leave rates unchanged. Traders seem to be front-running potential cuts as futures are pointing towards a strong probability of an easing by July, followed by more cuts by October.
In fact, the CME FedWatch tool indicates there’s a 70% chance of a rate cut next month, while suggesting a dramatic 95% likelihood of at least one reduction by October. Notably, President Trump wasn’t easy on Fed Chair Jerome Powell, referring to him as a ‘fool’ on Thursday and claiming any cuts would be akin to ‘jet fuel’ for the economy. This tumultuous discourse seems to only add fuel to the existing fire surrounding Bitcoin.
As for the numbers, Bitcoin reached as high as $103,460 in Asia early Friday, marking an increase of over 6% over 24 hours. Meanwhile, Ethereum stood out in the altcoin sphere, showcasing a 20% rise as it broke the $2,200 barrier, its highest since March. Other notable performers included Solana and Cardano, which rose over 10%. Interestingly, gold took a hit, lagging by more than 2%, indicating a shift away from traditional safe havens.
QCP Capital, a well-regarded entity in the trading community, stated that the current flow of money signals increased optimism among traders aiming for more upside potential. They mentioned robust demand for call options set to expire in May and June. However, they did underline the need for caution, suggesting that Bitcoin needs to maintain price levels above $100,000 for any significant confirmation before chasing momentum any further.
With Bitcoin comfortably above that critical milestone, traders are adjusting their positions, basking in the optimism surrounding potential trade agreement advancements. This comes after President Trump unveiled a so-called ‘major’ trade deal with the U.K., which is marked as his first significant negotiation since his return to office.
The agreement itself comprises minor tariff adjustments and some quota relief for British auto and steel exports, although economic experts expressed skepticism about its true impact. Economist Justin Wolfers was rather blunt, stating the agreement’s economic reality is quite ‘small.’ Meanwhile, Tapas Strickland from NAB remarked the deal is merely a “framework”. Despite the scepticism, the markets received the news well, indicating a warming sentiment toward easing trade tensions.
U.S. equity indexes enjoyed decent gains on Thursday, with the S&P 500 up 0.6% and the Nasdaq gaining 1.1%. However, the FTSE 100 didn’t mirror the upbeat sentiment, edging down by 0.3%. Moreover, ARK Invest’s recent report pointed to a strengthening narrative for Bitcoin. They noted net inflows of 29,800 BTC into U.S. spot ETFs—the highest rate since November—at the same time exchange balances dropped to 14%, the lowest since 2018. This price behaviour signals to them that Bitcoin ought to be viewed as a safe-haven asset amid ongoing global uncertainties.
