As the article was being prepared, Bitcoin
$ 104,874‘s price reclaimed the $105,000 mark following Trump’s statements. Yesterday’s fear was balanced by today’s announcements. In just a few hours, the Federal Reserve will reveal its interest rate decision along with 1-3 year projections. Although no major changes were expected in the projections, tensions with Iran may have altered the situation.
Trump and the BTC Uplift
The cryptocurrency markets rebounded due to ongoing statements from Trump as this article was being written. The U.S. will not be engaging in war for the time being and will refrain from offering more support. Nevertheless, Iran seems to be on the brink of losing its final opportunity. Despite the missiles, Trump indicated that Iran suggested intentions for an agreement. Historically, mutual attacks have led to agreements before matters escalated. The current lack of direct U.S. involvement encourages this possibility.
Trump described the Security Council meeting as positive. Moreover, in his address today, he declared that the U.S. would cease providing further assistance to Israel. There are discussions that the Iranian negotiation team might have landed in Oman at the time of writing, and confirmation of this could accelerate the market rise. The decline in oil prices is also seen as a positive signal for cryptocurrencies.
Fed Meeting and Cryptocurrencies
Today, the Federal Reserve will announce its interest rate projections for the coming years. Though not a fixed roadmap, these predictions are valued for reflecting members’ future outlook. Trump mentioned a signing agreement with India regarding tariffs, and as previously stated, we will witness the signing as July 9 approaches.
The Fed is likely informed about ongoing agreement negotiations and tailors its projections accordingly. Should Powell focus on the inflationary impact of war-induced oil price increases, a downturn in cryptocurrencies might gain momentum.
Tariffs exert inflationary pressure, and an agreement is imperative. The Iran conflict could push oil prices above $100, especially if the Strait of Hormuz closes, leading to a significant rise in inflation. Thus, a ceasefire is essential.
In an environment where hopes for tariff agreements and a ceasefire are growing, cryptocurrencies are expected to continue their upward trend. The extent to which the Fed instills fear regarding these two issues could impact the probability of a favorable scenario. Since the Fed receives in-depth information, Powell’s messages will be closely monitored for his projections.
The first interest rate cut is still anticipated for September.
