US stock markets started trading positively today, and this bullish sentiment appears to be directly spilling over into the crypto market. After weeks of declines and gloomy sentiment, optimism is finally returning.
At the time of writing, Bitcoin (BTC) is up 3.6% in the last 24 hours. Altcoins are also following suit: XRP is up 2.5%, while Dogecoin (DOGE) is up 6%.
Trump’s import tariffs are milder than expected
A key factor behind the optimism is the all-clear regarding the new import tariffs announced on April 2. While previously there were fears that entire sectors such as cars, chips, and medicines would be subject to high tariffs, the US government is now pursuing a more strategic approach.
The focus is on the so-called “Dirty 15” – countries that structurally export more to the US than vice versa, including China, the EU, India, and Japan. In practice, average import tariffs are lower than feared, which boosts confidence in the financial markets.
More liquidity in sight? Central bank shows cautious about-turn
The monetary policy of the U.S. Federal Reserve also plays a role. Although the Fed announced last week that it would not cut interest rates for the time being, there was other positive news: The central bank hinted that it might slow the pace of quantitative tightening (QT).
QT refers to the process by which the central bank reduces assets from its balance sheet, thereby withdrawing money from the financial system. A less aggressive approach leaves more liquidity in the market – a positive signal for investors. It fuels hopes that the Fed wants to give the economy some more leeway without immediately cutting interest rates.
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