Former U.S. President Donald Trump has renewed his call for a Federal Reserve interest rate cut, leading to a sharp rise in Bitcoin's value.
Trump's Call for Rate Cut
Donald Trump has publicly reiterated his demand for a **300 basis points rate cut** ahead of the upcoming Federal Reserve meeting. He criticized current rates as excessively high, claiming they cost the U.S. **$360 billion a point annually**. Trump has targeted Fed Chair Jerome Powell, applying pressure to the institution through social media platforms.
Impact on Bitcoin and Market
Following Trump's announcement, **Bitcoin (BTC)** surged past **$112,000**, showcasing a massive response from the market. The surge highlighted intense institutional interest, particularly from the U.S., 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.
Economic Consequences of the Proposed Cut
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 underscores its role as a **safe-haven and inflation hedge** during uncertain economic times.
In conclusion, by demanding a significant rate cut, Trump not only raises important economic questions but also directly influences the cryptocurrency market, driving interest in Bitcoin and similar assets.
