5 min readBitcoin and the broader cryptocurrency market rose on Thursday, boosted by optimism surrounding US-China trade talks, Strategy purchasing more BTC, and New Hampshire approving the first US Bitcoin Reserve. Will the market hold these gains after the Federal Reserve interest rate decision later today?
BTC is rising for a third straight day, recovering from Monday’s low of 93.9K to its current level of 97K, up 2.85% across the past 24 hours. Gains can be seen across the board with the cryptocurrency market capitalisation rising to $3.1 trillion, up 0.6% over the past 24 hours.
Trade talk optimism lifts risk assets
Gains in Bitcoin come tracking gains in the broader risk-driven markets after the US and China plan top-level trade talks in Switzerland this week. The announcement has boosted hopes that the world’s two largest economies will de-escalate the damaging trade war. Although a trade deal is unlikely immediately, this is undoubtedly a step in the right direction. Bitcoin and crypto prices remain sensitive to shifting trade war sentiment. Any sense of a prolonged deepening US-China trade war could spell further losses for BTC, while signs of a thawing of tension could boost Bitcoin.
New Hampshire‘s BTC Strategic Reserve
Separately, the New Hampshire Governor signed a law allowing the state to invest in cryptocurrencies and precious metals. This effectively makes New Hampshire the first state in the US to establish a strategic Bitcoin reserve and allows the treasurer to invest up to 5% of public funds in Bitcoin and other assets. The development comes after Florida decided to pull back from a similar proposal, and could trigger a wave of Bitcoin adoption in state finances. This would increase BTC demand, which is a bullish scenario for Bitcoin.
FOMC rate decision
Attention will now turn to the Federal Reserve interest rate decision later today. The Federal Open Market Committee will announce its policy decision at 2 pm ET. The Fed is expected to leave interest rates unchanged at 4.25 to 4.5%. The decision comes as the US labour market remains solid and inflation holds above the Fed’s 2% target. However, the US economic outlook remains uncertain in light of Trump’s trade tariffs.
How could the FOMC rate decision impact Bitcoin?
Heading into the meeting, the market is pricing in 79 basis points worth of rate cuts this year, with a 25 basis point cut in July. With no rate reduction expected today, attention will be on Federal Reserve Chair Jerome Powell’s press conference. Powell could use this opportunity to push back against market expectations. In this scenario, a more hawkish stance from the Fed could see immediate downside pressure on major cryptocurrencies. However, unexpected dovish language could spark a relief rally pushing Bitcoin out of its recent range towards 100k.
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