Bitcoin Drops 1.6% Amid Fed Rate Cut Speculation, Institutional Interest Surges

Bitcoin's price has recently stabilized after experiencing fluctuations, with the cryptocurrency trading at approximately $93,300 before dipping to around $91,800. This volatility comes amidst rising expectations for U.S. Federal Reserve rate cuts, driven by President Trump’s vocal criticisms of China and trade policies. The market's response to these economic indicators is complex, with traders estimating a 45% probability of two rate cuts by the July policy meeting. This shift in economic outlook has implications for both traditional equities and the cryptocurrency market.

Despite the recent drop in Bitcoin’s value, institutional interest remains robust, with significant inflows into spot Bitcoin ETFs. Over the past two days, these ETFs attracted approximately $1.8 billion—the highest two-day accumulation since early January. This suggests that while some investors may be capitalizing on short-term gains, others are positioning for long-term growth. The disconnect between these massive ETF inflows and Bitcoin’s price stagnation indicates that institutional buying is now being offset by profit-taking, as noted by Valentin Fournier.

President Trump’s rhetoric on trade relations, particularly towards China, visibly influences market sentiment. His recent post on Truth Social, urging Boeing to address its commitments to China, frames trade as a central issue in U.S. economic policy. These statements have a ripple effect, potentially impacting investor confidence and trading strategies across multiple asset classes, including cryptocurrencies. The interplay of political actions and economic forecasts will be critical as traders navigate future market trends. Understanding these dynamics will be essential for both current and future investors in the crypto space.