Bitcoin price could rally even as global trade war rages on — Here is why

The White House announced in a news conference that tariffs will begin on April 9th. Cryptocurrency and equity traders had hoped for an emergency solution to prevent US tariffs of 104% on Chinese imports. Peter Navarro stated in a press conference that US President Donald Trump would be imposing tariffs on April 9. “not a negotiation.”

As a result, the S&P 500 index closed on April 8 with a 1.6% loss, reversing earlier gains of 4%. This decline has led traders to wonder whether Bitcoin (BTCThe, despite the worsening of macroeconomic conditions can gain its bullish momentum.

Bitcoin is gaining in value as the spiraling US debt issue continues.

Between April 2 and April 7, the S&P 500 index dropped by 14.7%, causing panic among Bitcoin holders and forcing a retest of the $75,000 level—the lowest in more than five months.

On April 7, when President Trump appeared with Israeli Premier Benjamin Netanyahu, he reportedly stated that his aim was to “reset the table” He added that trade was a good thing. He said that “there can be permanent tariffs, and there could also be negotiations because there are things that we need beyond tariffs.” The midst of this uncertaintyYahoo Finance reported that IPOs were delayed and mergers stopped, but leveraged loan transactions and bond sales continued.

Stocks are likely to rise when trade-war risks diminish. The economists warn that tariffs may trigger a recession. inflation Reuters says that this will increase the likelihood of a recession. Assessing the impact of Bitcoin’s prices is a difficult task. The reason for this is that some investors believe the cryptocurrency’s fixed-monetary system to be a safety net against the continuous expansion Global fiat currency supply

BTC is suffering from short-term correlations, but interest rate reductions could help turn things around

The positive correlation between Bitcoin’s price and that of the stock exchange is likely to continue in the near future. The US’s fiscal difficulties present an opportunity to see Bitcoin’s value rise. After a slight dip in yields to 3.90% on April 7, the US Treasury yield for 10-year bonds rose to 4.28% by April 8. It is clear that the increase indicates investors’ desire for higher returns.

Rolling over $9 trillion will cost you more. federal government debt It is predicted that maturing within 12 months will increase the fiscal imbalance, and devalue the US dollar. US Dollar Index DXY has fallen to 103.0 from 104.2 in March 31, a divergence from US Treasury yields. This situation could potentially support Bitcoin’s price—a sentiment shared by BlackRock Larry Fink, CEO of the company, in his letter to investors dated 31 March.

Related: Weaker yuan is ‘bullish for BTC’ as Chinese capital flocks to crypto — Bybit CEO

Michael Gapen is the chief US economist at Morgan Stanley. stated On April 8, a client sent a message: “We think the right answer is for the Fed to wait in its current stance for longer,” CNBC reported this. Morgan Stanley updated forecast predicts that the US Federal Reserve will maintain interest rates between 4.25% and 4.50% through March 2026. “only a recession would change the calculus” The following are some examples of how to get started: “a recession could mean earlier and larger up-front cuts.”

Bitcoin is expected to gain momentum as traders become aware that the US Federal Reserve only has limited means to prevent inflation without a possible recession. Although it is difficult to predict the exact time of the breakout, delays in solving trade-war issues may drive investors towards scarce assets such as Bitcoin.

The article does not provide legal advice or investment recommendations and it is intended only for informational purposes. This article is solely for informational purposes. It does not represent or reflect Cointelegraph’s views.