Market Overview: Global Trade and Fed Policy Pressure Crypto Prices

The decline in major digital assets stemmed from a convergence of negative drivers. Key among them: global trade uncertainty and the Federal Reserve’s commitment to a hawkish policy stance. Last week, the White House secured major export deals with Japan and the EU—featuring fixed tariff rates and significant partner investments in the US economy ($550 billion and $600 billion, respectively). Markets initially welcomed the reduced risk of recession, but further progress on China trade talks in Stockholm proved elusive. Meanwhile, President Donald Trump announced new tariff hikes—up to 24% for Canada, 20% for Taiwan, and 25% for India. Additional tariffs for countries lacking formal US trade agreements are set to take effect, pressuring equity markets and non-dollar assets alike.

The sector is also reeling from the Fed’s firm stance: Wednesday’s meeting left rates unchanged at 4.50%, offering no clear signal of future easing. Chair Jerome Powell warned of a potential inflation uptick given rising trade tariffs, and stressed that policy will remain data-dependent. Despite the current pullback, most analysts see this decline as temporary. Market sentiment remains optimistic—many expect that persistent global uncertainty will ultimately benefit crypto as a haven asset. ETF inflows are steady, and the crypto “Fear & Greed” index is cooling, now down to 65.

Institutional Optimism and Regulatory Developments

On the regulatory front, momentum is building: Robert “Bo” Hines, head of the US President’s Digital Assets Council, reiterated the administration’s interest in building a strategic Bitcoin reserve and confirmed ongoing work on regulatory and infrastructure frameworks. Meanwhile, SEC Chair Paul Atkins announced a new initiative for clear digital asset regulation, proposing flexible broker licenses and a clear legal distinction between commodities (the majority of cryptocurrencies) and securities.

Outlook: Correction May Lose Momentum as Optimism Grows

Despite the current correction, institutional optimism remains high. This underlying confidence could slow the market’s decline or even prompt a return to growth next week. Investors continue to view crypto as a strategic hedge against global uncertainty, while ongoing ETF inflows and regulatory progress offer additional support for long-term market stability.