U.S. President Donald Trump’s trade tariff threat on global trade has increased the appeal of Bitcoin and gold.
Trump stated on his Truth social media platform, “We are going to require a commitment from these seemingly hostile countries that they will not produce a new BRICS currency, nor support any other currency to replace the mighty U.S. dollar, or they will face 100 percent tariffs,” in an attempt to discourage BRICS countries from moving away from the U.S. dollar as their reserve currency.
This has increased demand for Bitcoin and gold.
“In international trade or elsewhere, any country that seeks to replace the U.S. dollar should welcome tariffs and bid America farewell,” he added.
Bitcoin was trading close to $104,500, according to data from Binance, only 5% away from reaching a new all-time high. However, President Trump’s repeated threats of trade tariffs have slowed Bitcoin’s growth.
Price action indicated that Bitcoin had somewhat recovered from the $100k dip scare following Wednesday’s Federal Open Market Committee (FOMC) meeting. The U.S. Federal Reserve (Fed) acknowledged no improvement in inflation and chose to remain slightly hawkish while maintaining the Fed funds rate in the 4.25 percent to 4.50 percent range.
While highlighting a strong labor market, the Federal Reserve’s monetary policy statement insisted that risks to its dual mandate goals “are roughly in balance.” The committee also alluded to the uncertainty surrounding potential rate cuts in the future due to ongoing policy changes in the U.S.
According to the filing, the ETF will determine the market capitalization of the two cryptocurrency assets by multiplying the benchmark prices by the current supply in circulation. Bitwise filed documents for the joint ETF with authorities after Donald Trump won the election. Coinbase will provide custody, Bitwise Investment Advisers will manage the fund, and Bank of New York Mellon will act as the administrator, transfer agent, and cash custodian.
ECB President Lagarde’s disapproval of Bitcoin as a feasible reserve asset for central banks highlights tough obstacles ahead in Bitcoin adoption. This illustrates how governments continue to be skeptical of Bitcoin, which prevents its widespread adoption. Although some people are worried about a prolonged sell-off before the next significant bullish wave, the on-chain derivatives market’s activity indicates otherwise.
Gold reached a record high of $2,799 per ounce early Friday, increasing its gain to 6.5 percent for the month. Participants in the London bullion market rushed to borrow the yellow metal from central banks, setting off gold’s lifetime high.
A slight increase in U.S. Treasury bond yields was also triggered by the Fed’s first pause since the beginning of its easing cycle in September, along with its generally hawkish outlook. This helps the U.S. dollar (USD) maintain its weekly recovery gains from a one-month low and keeps pressure on the price of non-yielding gold.