Gold and Bitcoin are now more appealing due to U.S. President Donald Trump’s threat of trade tariffs.
To deter BRICS nations from abandoning the U.S. dollar as their reserve currency, Trump said on his Truth social media platform, “We are going to require a commitment from these seemingly hostile countries that they will not produce a new BRICS currency, nor support any other currency to replace the mighty U.S. dollar, or they will face 100 percent tariffs.”
The demand for gold and Bitcoin has surged as a result.
“Any country that wants to replace the U.S. dollar in international trade or elsewhere should welcome tariffs and bid America farewell,” he continued.
According to data from Binance, Bitcoin was just 5% away from hitting a new all-time high, trading near $104,500. However, President Trump’s frequent threats of trade penalties have hindered Bitcoin’s rise.
According to price activity, Bitcoin had partly recovered from the $100k fall panic after Wednesday’s Federal Open Market Committee (FOMC) meeting. The U.S. Federal Reserve (Fed) maintained the Fed funds rate between 4.25 and 4.50 percent while remaining somewhat hawkish, acknowledging that inflation had not improved.
The Federal Reserve’s monetary policy statement emphasized a robust labour market but also noted that threats to its dual mission aim “are roughly in balance.” The committee also highlighted the uncertainty surrounding future rate decreases due to the U.S. government’s continuous policy shifts.
- Following the announcement, U.S. Treasury yields surged, causing the 10-year note to rise four basis points to 4.581 percent. The U.S. Dollar Index rose 17 basis points to reach a session high of 108.1 index points. The Fed’s decision to suspend interest rate decreases may indicate a pessimistic long-term view for the cryptocurrency industry.
- The largest sovereign wealth fund in the world, Norges Bank Investment Management, is said to have made considerable investments in Bitcoin-related companies. A staggering $500 million is the value of the bank’s assets in Metaplanet (five-fifths) and MicroStrategy (seventy-two percent). Because of MicroStrategy’s significant Bitcoin holdings, its exposure is frequently viewed as a proxy for Bitcoin ownership.
- The U.S. Securities and Exchange Commission has given Bitwise Asset Management preliminary clearance for its exchange-traded fund, which monitors the prices of Bitcoin and Ethereum. The regulator’s approval of the fund’s Form 19b-4 on January 30 was the first step towards allowing the ETF to start trading. But Bitwise’s fund won’t open until the SEC approves Form S-1, a pending registration application.
The filing states that the benchmark prices will be multiplied by the current quantity in circulation to estimate the market capitalization of the two cryptocurrency assets by the ETF. Following Donald Trump’s presidential victory, Bitwise submitted paperwork to authorities for the joint ETF. Bitwise Investment Advisers will manage the fund, Coinbase will handle custody, and Bank of New York Mellon will be the cash custodian, administrator, and transfer agent.
Bitcoin adoption has significant challenges, as seen by ECB President Lagarde’s criticism of the cryptocurrency as a viable reserve asset for central banks. This demonstrates how governments’ ongoing skepticism about Bitcoin keeps it from being widely accepted. The activity of the on-chain derivatives market suggests otherwise, notwithstanding some concerns that there may be a protracted sell-off before the next big bullish wave.
Gold Hits Its Highest Point Ever
Early Friday saw gold hit a record high of $2,799 an ounce, bringing its monthly gain to 6.5 percent. Gold’s all-time high was triggered by the rush by London bullion market participants to borrow the yellow metal from central banks.
- Investors are worried about the potential economic impact of U.S. President Donald Trump’s tariff proposals. In the future, when geopolitical tensions are high, this might help the safe-haven bullion.
- Furthermore, the anticipation that Trump’s protectionist measures will raise inflation strengthens the precious metal’s buffer against growing price pressures.
Along with its generally hawkish stance, the Fed’s first pause since the start of its easing cycle in September also caused a modest uptick in U.S. Treasury bond yields. This keeps pressure on the price of non-yielding gold and helps the U.S. dollar (USD) sustain its weekly comeback gains from a one-month low.
