Trump's interest rate cut shocks the crypto world! Bitcoin is set to surge to $110,000
1. Interest rate cut = injecting ‘steroids’ into the market
Trump's logic is simple: lowering interest rates reduces the cost of borrowing, encouraging businesses and the public to spend and invest more, while saving the government some debt interest. If the Federal Reserve really goes ahead with this, more money will circulate in the market, and a portion of that hot money is likely to flow into high-risk assets like Bitcoin—after all, during the Fed's massive monetary easing in 2020, Bitcoin skyrocketed from $5,000 to $65,000. Recently, Bitcoin has been fluctuating around $106,000, and an interest rate cut could push it higher.
2. As the dollar weakens, Bitcoin strengthens
Lowering interest rates will weaken the dollar, while Bitcoin is often seen as “digital gold” that fights inflation. Currently, U.S. CPI data is lower than expected, temporarily easing inflationary pressures, but Trump's tariff policies may drive prices up in the future. If expectations of dollar depreciation strengthen, more people may turn to Bitcoin as a safe-haven choice, especially as institutional funds enter the market through ETFs.
3. The market is already betting on Fed actions
Although the probability of a rate cut in June is zero, traders are betting on a 75% chance of a rate cut in September. With Trump stirring things up, market sentiment will be even more sensitive. Bitcoin might test $110,000 in the short term, but if the Federal Reserve does not comply, it could crash back to the support level of $103,000. On-chain data shows that large holders have been quite active recently, which could be a signal of a storm brewing.
4. Don't forget the risks
Trump and Fed Chairman Powell have been at odds, and Powell may hold firm against cutting rates for the sake of central bank independence. Additionally, rate cuts could trigger asset bubbles, and there are opposing voices within the Fed. If inflation data suddenly rebounds, or if Trump's tariffs cause prices to soar, the Fed may need to hit the brakes, and Bitcoin could take a hit.
As the market continues to change, we need to closely monitor market signals to seize new entry opportunities. Like + comment 168, and we'll navigate the bull market together to seize this major opportunity!
