BTC/USD: Trade and Monetary Drivers Support the Rally in “Digital Gold“

Investors are rotating into crypto as a haven amid the risk of renewed tension between the world’s two largest economies, the United States and China. The 90-day “trade truce” agreed in May expires on August 12. A failure to extend it—there are no clear signs of an extension—would push reciprocal tariffs well above 100.0%, effectively freezing trade between the US and China and increasing the risk of a global economic downturn.

Additionally, the dollar faces pressure from expectations of an upcoming Federal Reserve rate cut following the addition of policy-dove Stephen Miran to the Fed’s Board of Governors. Analysts argue that even if inflation ticks higher—many forecasts expect that outcome—the White House could still push for at least one reduction in borrowing costs in the near term. Against this backdrop, investors have been trimming dollar exposure in favor of alternative assets, including crypto. Inflows into Bitcoin ETFs over the last three sessions totaled 772.9 million, while the Fear & Greed Index remains elevated at 70, signaling sustained near-term demand for digital assets.