The cryptocurrency market continues to record strong growth as Bitcoin and Ethereum expand their upward momentum, reacting to changes in U.S. trade policy and new economic stimulus measures from China.
Bitcoin and Ethereum Surge Thanks to Global Economic Policies
By the end of Wednesday, Bitcoin had increased by an additional 5% in 24 hours, approaching the $92,000 mark, marking a 9% increase over the week. Ethereum also rose 4.7% to $2,285, according to data from CoinGecko.
The increase in the cryptocurrency market occurs amid escalating trade tensions between the U.S. and China. However, China has just announced a series of economic stimulus measures at the National People's Congress to stabilize its economy, which is under significant external pressure.
China Accelerates Economic Stimulus to Address Trade Tensions
Chinese Premier Li Qiang acknowledged the increasing challenges facing the country's economy, including trade, science, and technology. In response, Beijing has increased its budget deficit and infrastructure spending, a move aimed at supporting economic growth as the international environment becomes more complicated.
According to Singapore-based digital asset trading firm QCP Capital, changes in macroeconomic conditions are causing the cryptocurrency market to have a closer correlation with the stock market. "The price action of crypto reflects broader economic fluctuations," QCP Capital noted in a recent report.
Additionally, the market is also watching the first Crypto Conference organized by the White House this Friday. However, QCP Capital warns that sentiment can change quickly, as investors are still waiting to see if any specific policies will be issued.
U.S. Eases Tariffs, Market Reacts Positively
On Wednesday, the White House announced a temporary tariff exemption for one month on imports from Mexico and Canada, a move aimed at giving U.S. auto manufacturers more time to adjust to the new trade policy.
President Donald Trump urged car manufacturers to "invest, move, and shift production back to the U.S. to avoid tariffs," according to White House Press Secretary Karoline Leavitt.
This information has boosted the U.S. stock market, with the S&P 500 and Dow Industrial Average rising 1.1%, while the Nasdaq Composite increased by 1.5%.
Along with this, lower U.S. Treasury yields and lower oil prices have helped improve financial conditions, providing additional momentum for risk assets, including cryptocurrencies.
Will Crypto Continue to Benefit If Trade Tensions Increase?
Juan Leon, a senior investment strategist at Bitwise Asset Management, stated: "Tariff negotiations are having a strong impact on the USD, interest rates, and oil prices, easing financial conditions. Additionally, China has just announced new economic stimulus measures, all these factors are driving crypto to continue its growth."
He also emphasized that if trade tensions continue to escalate, it could prompt a wave of monetary policy easing globally. At that point, demand for alternative assets like crypto may rise even further.
Conclusion
The combination of the new trade policy from the U.S., economic stimulus packages from China, and volatility in global financial markets is creating favorable conditions for Bitcoin and Ethereum to continue their price increases. However, volatility is always an unavoidable factor in the crypto market. Investors still need to be cautious in the face of unpredictable developments in the near future.
🚨 Risk Warning: Crypto is a highly volatile market and may not be suitable for everyone. Investors should do thorough research before participating and only invest money they can afford to lose.