Bitcoin Steadies Amid Rate Cut Bets and Tariff Uncertainty

Bitcoin held relatively firm on Wednesday after clawing back some losses earlier this week, though sentiment across crypto markets remained cautious amid uncertainty over U.S. tariffs, rising bond yields, and expectations for lower interest rates.

Bitcoin Price Action

The world’s largest cryptocurrency rose 0.5% to $110,812.6 by 01:38 ET (05:38 GMT).

• Earlier in the week, it had fallen to a two-month low near $107,000, marking a 12% pullback from its mid-August record peak above $124,000.
• The rebound has been fragile, with traders wary of broader risk-off sentiment in global markets.

Rate Cut Bets in Focus

Bitcoin’s recent moves continue to track shifting expectations around the Federal Reserve:

• Markets still see a 90% chance of a 25 bps rate cut in September (CME FedWatch).
• Last week, Fed Chair Jerome Powell flagged labor market risks as a reason for potential policy easing.
• Investors now await Friday’s U.S. nonfarm payrolls report, which could confirm or undermine these bets.

Tariffs, Fed Independence, and Political Risk

• Uncertainty over Trump’s tariffs intensified after a U.S. appeals court ruled many levies illegal, though they remain in place until October 14 pending a Supreme Court appeal.
• Trump also attempted to fire Fed Governor Lisa Cook, sparking legal resistance. Analysts warn such moves undermine confidence in Fed independence, further unsettling markets.
• Rising global bond yields, linked to concerns about high government debt, added to investor caution.

Whale Moves and ETF Flows

• Reports showed dormant Bitcoin whales moved large holdings into Ether, highlighting profit-taking among major investors.
• U.S. spot Bitcoin ETFs saw outflows, in contrast to inflows into Ethereum ETFs, showing shifting institutional preference within crypto markets.

Corporate and Political Crypto News

• Strategy (formerly MicroStrategy, NASDAQ:MSTR), the world’s largest corporate Bitcoin holder, added about 4,048 BTC worth $450M in late August. The move failed to boost prices significantly.
• Digital tokens from Trump’s venture World Liberty Financial ($WLFI) slumped after their market debut, underscoring investor caution around politically linked assets.

Altcoin Performance

Crypto markets were broadly mixed:

• Ethereum (ETH): Fell 1.6% to $4,315.03.
• XRP: Gained 0.6% to $2.8267.
• Solana (SOL): Rose 2.8%.
• Cardano (ADA): Up 1.2%.
• Dogecoin (DOGE): Gained 0.2%.
• $TRUMP token: Added 0.8%.