By Research Expert | 2 hours ago
$BTC Bitcoin is rapidly approaching the $100,000 mark, rebounding sharply this week and hitting levels last seen before the markets reacted to escalating trade tensions. The nearly 30% price jump since April’s lows is driven by growing concerns over the U.S. dollar and broader economic instability.
“The Fed’s worst nightmare just got worse,” analysts at The Kobeissi Letter wrote on X. “Stagflation has arrived, and markets are reacting.”
Recent data from the Commerce Department revealed the U.S. economy contracted at an annualized rate of 0.3% in Q1, pressured by a historic increase in imports. Additionally, the Federal Reserve’s preferred inflation metric—the personal consumption expenditures (PCE) price index—held steady in March after rising 0.4% in February, marking its highest level since July 2024.
The data adds weight to fears of stagflation, a scenario where inflation rises despite economic stagnation. “We have rising inflation with a weakening economy,” Kobeissi analysts noted. “This is the lose-lose situation the Fed hoped to avoid.”
Although the Fed is expected to hold rates steady at its meeting next week, markets anticipate rate cuts beginning in June—a move that could fuel further gains in bitcoin and other risk assets.
“A more dovish Fed generally injects liquidity into the market, which benefits risk assets like bitcoin,” said Tracy Jin, COO of crypto exchange MEXC.
Bitcoin’s recent rally follows a sluggish performance earlier this year when it declined alongside stocks amid renewed trade tensions under former President Trump. However, since Trump’s "Liberation Day" announcement, bitcoin has surged past $90,000, showing resilience despite broader market uncertainty.
“Bitcoin is decoupling from traditional equities,” said David Hernandez of 21Shares. “As the economic impact of Trump’s tariffs unfolds, we expect bitcoin to continue outperforming as investors seek protection from policy-driven volatility.”
