- Trump demands a major rate cut from the Federal Reserve.
- Bitcoin reaches an all-time high of $112,000.
- US institutional demand for BTC spikes significantly.
Donald Trump has called for a 300 basis points rate cut by the Federal Reserve, driving Bitcoin past $112,000.
The demand for a significant interest cut could potentially boost inflation and asset prices.
President Trump has publicly reiterated his demand for a 300-basis-point cut in interest rates ahead of the upcoming Federal Reserve meeting. Trump criticized current rates as excessively high, claiming they cost the U.S. $360 billion a point annually. He has targeted Fed Chair Jerome Powell, pressuring the institution through social media platforms. Kobeissi Letter Discusses Market Movements on Twitter
Following Trump’s announcement, Bitcoin (BTC) surged to an unprecedented high above $112,000, showing a massive response from the market. The surge highlighted intense institutional interest, particularly from the US, contributing to a Coinbase Premium Gap of 42 points. Analysts suggest that such a rate cut could channel more capital into digital assets and gold, driving market prices upwards. An article on CoinGape elaborates on Trump’s advocacy for such a drastic rate cut and its potential market impacts.
“The country’s interest rates are at least 3 points too high…Too Late is costing the U.S. 360 Billion Dollars a Point, PER YEAR, in refinancing costs.” — Donald Trump, President of the United States, via Truth Social source
Financial experts view the proposed cut as potentially inflationary, with analysts anticipating a decline in the USD and a rise in gold prices. Historical instances show a maximum of 100bps cuts during economic crises, like in 2008 and March 2020, but never 300bps in peacetime. The significant increase in Bitcoin underlines its role as a safe-haven and inflation hedge during uncertain economic times.
Though there are no direct comments from prominent crypto figures, US-based analysts report a strong institutional demand for Bitcoin following Trump’s proposal. The suggestion of a substantial rate cut has intensified market debates and prompted a considerable response, particularly among US investors and institutions.
