Federal Reserve Signals Crypto-Friendly Shift as Markets Reel from Tariff Turmoil

The Federal Reserve's Crypto Shift Amid Market Turmoil

According to Forbes, Federal Reserve Chair Jerome Powell has made a significant statement regarding the role of banks in the cryptocurrency market. Powell emphasized that banks are "perfectly able to serve crypto customers" provided they understand and manage the associated risks. This marks a notable shift in sentiment under the Trump administration, contrasting with the previous Biden administration's stricter stance on crypto, often referred to as "Operation Choke Point 2.0." Meanwhile, the cryptocurrency market has faced a sharp downturn, with Bitcoin dropping below $100,000 and other major cryptocurrencies like Ethereum and XRP experiencing even steeper declines. The market turbulence has been attributed to escalating trade tensions following President Trump's announcement of tariffs on imports from Canada, Mexico, and China.

Bitcoin Nears $100K as Market Rebounds

Coinpedia reports that the cryptocurrency market has seen a 5.97% surge, pushing its total market cap to $3.21 trillion. Bitcoin, leading the charge, has climbed to $99,222.15, reclaiming a dominance of 60.84%. Despite a dip in trading volume, investor sentiment remains optimistic as Bitcoin approaches the psychological $100K mark. Altcoins like Ethereum and Solana have also shown strong performance, with Ethereum jumping 9.08% to $2,708.49. The market rally is largely driven by optimism surrounding President Trump's executive order to establish a Sovereign Wealth Fund aimed at securing long-term economic stability.

ETF Flows Reflect Crypto Market Volatility

Decrypt highlights the impact of recent market chaos on Bitcoin and Ethereum ETFs. While Bitcoin has rebounded strongly, Ethereum investment products recorded net zero flows for the first time since U.S.-based ETFs were approved. Ethereum's struggles are linked to its exposure to the technology sector and global growth concerns. Despite this, Bitcoin saw $486 million in global fund inflows, showcasing its resilience. The market's volatility was further exacerbated by President Trump's tariff announcements, which initially caused a sell-off but later led to a partial recovery following a pause on tariffs against Mexico and Canada.

Trump's Tariffs Shake Crypto Markets

The Associated Press reports that President Trump's tariff threats have sent shockwaves through the cryptocurrency market. Bitcoin's price fell from $105,000 to $92,000 before rebounding above $100,000 after Trump announced a temporary pause on tariffs for Mexican and Canadian goods. Other cryptocurrencies, including Ethereum and Dogecoin, experienced significant declines. Trump's own meme coin also saw a dramatic drop, trading at $19, down 75% from its all-time high. The broader financial markets have also been affected, with Trump warning Americans of potential economic "pain" as a result of the tariffs.

Crypto Prices Slide Amid Tariff Concerns

According to the Financial Times, the cryptocurrency market has faced downward pressure due to President Trump's tariff threats. Bitcoin, while resilient, has seen fluctuations, and Ethereum continues to struggle. The tariffs, targeting imports from Canada, Mexico, and China, have created uncertainty across global markets. Despite the challenges, Bitcoin remains near its all-time high of $109,000, reflecting its growing role as a mainstream financial asset. Analysts note that the market's reaction underscores the interconnectedness of cryptocurrencies with broader economic and geopolitical developments.

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