Summary:
Cryptocurrency investors have been facing losses due to tariff concerns, but optimism rose with Gensler’s departure, resolution of lawsuits, and expected ETF approvals. US-China trade talks have resumed, with positive progress reported. Potential impacts on Federal Reserve policies could be seen if tariffs are resolved. A reduction in interest rates could benefit the cryptocurrency sector.
Progress in US-China Trade Talks:
Recently, a pause in US-China trade discussions ended as the Chinese delegation returned to Lancaster House. Talks are set to resume soon, with optimism for a positive outcome. US Commerce Secretary Lutnick stated that negotiations are progressing well and may conclude soon, potentially boosting risk markets.
Potential Impacts on Federal Reserve Policies:
Despite declining inflation rates, the Federal Reserve has not cut interest rates due to tariff concerns. If tariffs are resolved, the Fed may reconsider and reduce interest rates, easing fears of inflation resurgence. This could benefit the cryptocurrency sector by enhancing global liquidity and reducing the cost of money.
For the cryptocurrency sector, a reduction in interest rates could lead to a market surge, similar to conditions seen before bull runs in 2021. Factors like a crypto-friendly US stance and institutional demand indicate potential historic milestones for cryptocurrencies in the best-case scenario.
