Bitcoin surged past $90,000 on Wednesday as investors grew hopeful that President Donald Trump might revise tariffs on Canada and Mexico. The cryptocurrency was trading near $89,700, up 3% in the past 24 hours, according to CoinMarketCap. Its rally coincided with gains in traditional markets, with the S&P 500 rising 1.2% in midday trading.
Commerce Secretary Howard Lutnick said on Tuesday that tariffs were “open to negotiation” and could be amended soon, easing fears that trade tensions could harm economic growth or deter the Federal Reserve from cutting interest rates. Bitcoin had previously dropped to $82,700 on Tuesday and below $79,000 last week but saw a brief rebound over the weekend after Trump announced a “strategic crypto reserve.”
Trump addressed concerns during a speech to Congress on Tuesday night, saying his trade policies would create “a little disturbance, but we’re okay with that.” Still, analysts are wary about a potential trade war’s impact on the economy. Greg Magadini, director of derivatives at Amberdata, said that markets are beginning to factor in the risk of a recession “due to global trade slowing down as reciprocal tariffs come into play.”
Bonds have gained appeal as stocks react to tariff uncertainty. The 10-year Treasury yield has fallen to 4.23% from 4.42% a month ago, reflecting a move toward safer assets. Brian Rudick, head of research at crypto market maker GSR, said, “People are now watching economic growth particularly closely. Folks are looking at the incoming data and seeing it point to a potentially softening U.S. economy.” The Federal Reserve Bank of Atlanta projected on Monday that the U.S. economy will shrink at an annualized rate of 2.8% in the first quarter.
Concerns over economic slowdown have been amplified by cost-cutting measures introduced by Elon Musk at the White House, which have led to job reductions. Rudick described the Department of Government Efficiency as “anti-stimulus” since government spending has been scaled back. Meanwhile, crypto regulations remain in limbo as legislation concerning market structure and stablecoins faces delays in Congress.
Market expectations for interest rate cuts have shifted in response to recent developments. Fed futures traders initially expected just one rate cut this year, but with Trump’s tariff changes in focus, they now anticipate as many as three, according to CME FedWatch.
While Bitcoin has benefited from renewed investor optimism, uncertainty remains high. Geopolitical tensions in Eastern Europe and broader macroeconomic challenges continue to weigh on risk assets, leaving traders closely monitoring policy decisions in Washington and global economic indicators.
