A significant reversal of fortunes in risk markets on Tuesday has propelled bitcoin (BTC) nearly 10% higher from its lowest point during the session, while the Nasdaq has turned positive after previously being down almost 2% earlier in the day.
After weeks of volatility fueled by Trump’s tariff threats, both stocks and cryptocurrencies started the day sharply lower as the tariffs against Mexico, Canada, and China officially went into effect.
However, late in the U.S. morning, dip-buyers stepped in, and with just over an hour left before the stock market closes, the Nasdaq is showing a 0.7% gain for the session. The S&P 500 has reduced a significant early loss to merely 0.25%.
Currently trading just above $88,000, bitcoin has increased by 1.5% over the last 24 hours. On the other hand, Ether (ETH) has been lagging, remaining flat at $2,171 during the same timeframe.
Tuesday’s price action is just one part of a wild 10-day journey for bitcoin, which faced a sharp decline of over 20% during a six-day stretch from February 21, falling to just above $78,000, only to bounce back more than 20% to about $95,000 in the following three days, before experiencing yet another drop yesterday and this morning to around the $81,000 mark.
A look at crypto-related stocks shows that MicroStrategy (MSTR) is up 11%, Coinbase (COIN) has gained 4%, and Marathon Holdings (MARA) is enjoying a 5% increase.
Green shoots?
It’s been a challenging few weeks for risk assets, yet this downturn might also be setting the stage for a future recovery.
Not long ago, markets had almost dismissed the likelihood of any Federal Reserve rate cuts in 2025, with the 10-year Treasury yield on the verge of breaking above 5%. However, the combination of the tariffs, some weaker economic data, and the decline in markets has altered that perspective.
Currently, interest rate traders are fully anticipating three or more Fed rate cuts this year, with the first potential move as soon as May. Correspondingly, the 10-year Treasury yield has decreased from 4.80% at the time of Trump’s inauguration six weeks ago to 4.15% now.
