The Crypto market has shown resilience and is expecting long-term gains from Trump’s trade war. Bitcoin remains strong as pro-crypto sentiment builds in Washington. Following the “Liberation Day” tariffs, the crypto market has experienced volatility driven by geopolitical developments and regulatory actions. Bitcoin continues to lead the market sentiment, trading at $84,121 with a modest increase. Despite concerns of a market-wide correction, the anticipated sell-off did not materialize, keeping the market in the green and maintaining an upward trajectory.
After the trade war, the Volatility Index spiked to an eight-month high, showing increased market uncertainty and risk appetite. Major U.S. stock indices saw significant sell-offs, erasing trillions in market capitalization. Additionally, the 10-year Treasury yield retraced to pre-election levels, indicating slower economic growth in Q2, leading investors to move money into safe assets like Treasury bonds. Market participants priced in a 20% probability of three rate cuts in 2025, as analysts speculate that U.S. aggregate demand could slow due to tariffs, prompting the Federal Reserve to cut rates, allowing for more cheap capital to flow into the market.
Despite the macroeconomic volatility, investors in the crypto market see long-term value, particularly in Bitcoin. Unlike equities, cryptocurrencies have shown resilience. Bitcoin dominance increased by 0.30% following the trade war announcement, reflecting a shift in investor sentiment towards digital assets as an alternative store of value. With the approval of Paul Atkins as the next SEC Chair by the U.S. Senate Banking Committee, the crypto market expects a major shift in regulation towards clearer, industry-friendly policies. This shift has reinforced long-term investor confidence in the crypto markets.
Bitcoin remains above $80k, major altcoins are holding critical support levels, and the high probability of Federal Reserve quantitative easing, combined with a regulatory shift at the SEC, has allowed the crypto markets to absorb recent macro volatility. If these conditions continue, risk appetite may increase, leading to stronger institutional inflows and a potential market-wide rally in the coming quarters. Overall, the crypto market remains optimistic amid regulatory changes and shifting economic landscapes, holding onto the potential for long-term gains despite short-term volatility.
