On Thursday, Bitcoin (BTC-USD) surged over 2%, despite Federal Reserve minutes released on Wednesday showing that US officials are hesitant to implement immediate rate cuts, citing the Trump administration’s trade policies as a potential obstacle to addressing inflation.
As of Thursday, Bitcoin (BTC-USD) was trading above $97,000 (£76,938), reflecting an approximate 2% increase after a daily low of just above $95,000, according to data from CoinGecko.
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The price of Bitcoin is closely linked to interest rate cuts, as lower rates enhance liquidity and drive investors toward riskier assets like cryptocurrencies and stocks.
Despite Bitcoin’s recent price increase, the latest Fed minutes indicate that officials are still cautious. They noted that inflation must decrease further before they can consider any additional rate cuts—largely influenced by concerns that the tariffs and trade policies instituted by US President Donald Trump could hinder inflation management efforts.
“The minutes from January’s policy meeting suggest that officials are not in a rush to relax monetary policy,” said DeVere Group CEO Nigel Green, who reiterated the firm’s view that rate cuts are likely far off.
The Federal Open Market Committee decided unanimously in its January meeting to keep its key policy rate unchanged after a series of three consecutive cuts in 2024 totalling one full percentage point.
The minutes also highlighted concerns regarding the potential effects of changing trade and immigration policies, geopolitical tensions disrupting supply chains, and stronger-than-anticipated household spending.
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Policymakers acknowledged that while the current policy stance is “significantly less restrictive” than prior to the cuts, more favorable economic conditions must emerge to consider easing further.
In a more bullish turn for the cryptocurrency market, Trump spoke at the FII Priority Summit in Miami Beach on Wednesday, reiterating his aim for the United States to become a leading force in cryptocurrency.
Trump claimed that his administration has put an end to the previous government’s “war on crypto,” a shift that could spark the next significant rally.
However, BRN analyst Valentin Fournier commented: “Following Trump’s support for crypto, markets have begun to gain momentum. Yet, this positive trend could be fleeting as no major catalysts have emerged in recent weeks, and regulatory changes remain challenging to monitor and evaluate.”
