Bitcoin (BTC-USD) rallied by more than 2% on Thursday, even as the release of Federal Reserve minutes on Wednesday revealed that US officials remain reluctant to implement near-term rate cuts — citing the Trump administration’s trade policy as a potential barrier to curbing inflation.
Bitcoin (BTC-USD) was holding above $97,000 (£76,938) on Thursday, a gain of around 2%, rising from a daily low of just over $95,000, according to CoinGecko data.
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Bitcoin’s value is closely tied to interest rate cuts because lower interest rates boost liquidity and drive investors toward riskier, higher-yielding assets like cryptocurrencies and equities.
Despite the digital asset’s price increase, recent Fed minutes reveal that central bank officials remain cautious. They agreed that inflation must decline further before considering additional rate cuts — a stance partly driven by concerns that US president Donald Trump’s tariffs and trade policies could impede inflation control.
“The minutes from the January policy meeting seem to confirm that officials are in no hurry to ease monetary policy,” DeVere Group CEO Nigel Green said, reinforcing DeVere Group’s outlook that rate cuts remain a distant prospect.
Wednesday’s Fed minutes from its January monetary policy decision show that, in a unanimous decision, the Federal Open Market Committee opted to hold its key policy rate steady following three consecutive cuts in 2024 that totalled one full percentage point.
The minutes also reflected concerns over potential impacts from shifting trade and immigration policies, geopolitical risks disrupting supply chains, and stronger-than-expected household spending.
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Policymakers acknowledged that while current policy is “significantly less restrictive” than before the cuts, more favourable economic conditions are needed to justify further easing.
However, adding a bullish note for the cryptocurrency market, Trump spoke at the FII Priority Summit in Miami Beach on Wednesday, reiterating his vision for the United States to become a global leader in cryptocurrency.
Trump said that his administration had ended the previous government’s “war on crypto,” a move that could catalyze the next major rally.
Yet, BRN analyst Valentin Fournier said: “Following Trump’s reaffirmation of support for crypto, markets have started to pick up momentum. However, this positive momentum could be short-lived, as no significant catalysts have emerged in weeks, and regulatory developments remain difficult to track and measure.”
