Bitcoin (BTC) approached the $100,000 mark on Thursday, with dogecoin (DOGE) and Cardano’s ADA leading the cryptocurrency market gains. These increases come as traders respond to recent dovish signals from the Federal Reserve and news of a potential trade deal with the United Kingdom, hinted at by U.S. President Donald Trump. DOGE gained 5%, while ADA jumped 4%, and other major cryptocurrencies such as ether (ETH), BNB Chain’s BNB, XRP, and Solana (SOL) saw moderate gains of 2-3%.
Cryptocurrency Market Reacts to Positive Developments
The cryptocurrency market experienced a notable boost on Thursday, with Bitcoin nearing the $100,000 level. Dogecoin (DOGE) and Cardano’s ADA emerged as the biggest gainers, each rising by 5% and 4%, respectively. Other prominent cryptocurrencies, including Ethereum (ETH), Binance Coin (BNB), XRP, and Solana (SOL), saw smaller increases ranging from 2% to 3%.
This surge in crypto values comes amid recent signals from the U.S. Federal Reserve that have led traders to anticipate possible interest rate cuts. Additionally, U.S. President Donald Trump teased a major trade deal with the U.K. The announcement, scheduled for 10 a.m. ET, marks the start of what Trump described as a series of similar deals. This news has raised hopes that months of uncertainty caused by tariffs might soon ease, potentially rekindling investor risk appetite.
U.S. Trade Deal with the U.K. Drives Market Sentiment
On Wednesday night, President Trump shared a social media post hinting at the unveiling of a significant trade agreement with the U.K. The announcement, scheduled for 10 a.m. ET, marks the start of what Trump described as a series of similar deals. This news has raised hopes that months of uncertainty caused by tariffs might soon ease, potentially rekindling investor risk appetite.
Global markets, including equities and commodities, have been affected by tariff concerns in recent weeks. If the trade deal with the U.K. reduces tariff pressures, it could provide a positive boost to risk assets, including cryptocurrencies.
Federal Reserve Signals Uncertainty Over Interest Rates
The Federal Reserve’s decision to keep interest rates steady, announced on Wednesday, was expected by many. However, the central bank’s stance has left markets divided on the timing of future rate cuts. According to the CME FedWatch Tool, there is a 55% probability that the Federal Reserve will reduce rates to the 4.00%-4.25% range by July. Furthermore, traders are pricing in a total of 100 basis points in rate cuts by the end of the year.
Bitcoin is inching back up toward $100K with the steady Fed rate decision and growing expectations of future rate cuts. Given the pressure from the current administration on the Federal Reserve chair, there are many possibilities—uncertainty seems to be the only certainty.
Concerns About Stagflation and Its Impact on the Economy
Despite the positive news for cryptocurrencies, some analysts remain cautious about the broader economic outlook. There are concerns that the U.S. may be heading toward stagflation—a period marked by high inflation, slow economic growth, and rising unemployment. Experts warn that such a scenario could undermine the Federal Reserve’s policy objectives.
The Federal Reserve faces a tough policy dilemma that risks affecting both sides of its dual mandate. As businesses pass rising tariff costs onto consumers, inflation is expected to rise again in the next six months, while employment indicators point to a worsening job market.
While CF Benchmarks anticipates a 100 basis point rate cut by year-end, there are concerns the Fed could act too late, exacerbating the economic situation.
Bitcoin as a Hedge Against Economic Uncertainty
Despite these economic concerns, Bitcoin continues to perform well. Experts highlight the cryptocurrency’s role as a hedge against macroeconomic volatility. Recent data shows record inflows into U.S. spot Bitcoin ETFs, including BlackRock’s IBIT, which has seen $4.3 billion in inflows in the past month.
In today’s volatile macroeconomic environment, Bitcoin has clearly become a key beneficiary. With increasing investments in Bitcoin ETFs, it’s evident that Bitcoin is seen as a store of value in uncertain times.
Bitcoin’s Growing Role in Investment Portfolios
Jupiter Zheng, a partner at HashKey Capital, also noted that Bitcoin’s recent price surge is part of a larger shift in the cryptocurrency market. Bitcoin’s rise highlights its growing role as a hedge against macroeconomic and geopolitical instability. More investors now view crypto as an essential part of resilient investment portfolios.
As the cryptocurrency market continues to evolve, Bitcoin’s upward momentum and the performance of altcoins like Dogecoin and Cardano suggest that investors are increasingly turning to crypto as a stable investment amidst global uncertainty.
