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Bitcoin extended its losing streak on Wednesday, edging 0.4% lower to $95,347.5 by 01:17 ET (6:17 GMT) as investors adopted a cautious stance ahead of potential U.S. trade tariffs and the release of the Federal Reserve’s meeting minutes.
Despite the dip, Bitcoin continues to trade within a narrow range, reflecting uncertainty as traders await clearer signals on macroeconomic conditions and regulatory policies.
Key Market Factors Affecting Bitcoin:
1. Trump’s Fresh Tariff Threats
- President Trump announced plans to impose 25% tariffs on automobiles, semiconductors, and pharmaceuticals, with possible increases throughout the year.
- The tariffs aim to protect U.S. industries and encourage companies to relocate operations domestically.
- Confirmation is expected by April 2, following a trade policy review.
- A trade war escalation could strengthen the U.S. dollar, making Bitcoin and other risk assets less attractive.
2. Federal Reserve Meeting Minutes
- Investors await the Federal Reserve’s January meeting minutes, due later today, for insights into the interest rate outlook.
- Stronger-than-expected U.S. economic data and hawkish Fed comments have fueled speculation that rates may remain higher for longer.
- A stronger dollar and higher interest rates historically weigh on Bitcoin, reducing its appeal as an inflation hedge.
MicroStrategy (Strategy) Expands Bitcoin Holdings
- Strategy (formerly MicroStrategy, NASDAQ: MSTR) announced plans to raise $2 billion through a private offering of zero-coupon convertible senior notes due in 2030.
- The company intends to use the proceeds to acquire more Bitcoin as part of its aggressive accumulation strategy.
- Strategy has also provided an option for initial purchasers to buy an additional $300 million in notes within five days of issuance.
- 21/21 Plan:
- Strategy aims to raise $42 billion over three years via equity and debt financing to invest in Bitcoin.
- Since launching on October 30, 2024, the company has acquired nearly 200,000 BTC, bringing its total holdings to 478,740 BTC—solidifying its position as the largest corporate Bitcoin holder.
- Upcoming Webinar: Strategy will host a live institutional webinar on Wednesday to discuss details of the offering.
Market Outlook:
- Short-term risks: Bitcoin remains under pressure from a potential trade war, strong dollar, and high interest rates.
- Long-term support: Corporate adoption, as seen with Strategy’s aggressive accumulation, may provide a strong foundation for future price appreciation.
- Key events to watch:
- Fed meeting minutes for rate signals.
- Further trade war developments impacting macro risk sentiment.
- Bitcoin’s price reaction to corporate and institutional demand trends.
Bitcoin’s next major move will likely depend on how investors react to macroeconomic cues and regulatory clarity in the coming days.
