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Inflation, trade, and tariffs: A mixed macro picture

Inflation, trade, and tariffs: A mixed macro picture

assets and the anticipation surrounding key macro events, numerous factors are driving market movements across equities, volatility, digital assets, fixed income, currencies, and commodities.

I’ll break down these drivers and catalysts, weaving in specific data and headlines to provide a thorough understanding of the current landscape.

Equities: Trade tensions and regional resilience

The equities market is experiencing a tug-of-war between geopolitical uncertainty and regional strength. Donald Trump’s confirmation of a 50 per cent tariff on copper imports, a figure double the anticipated 25 per cent, has sent ripples through global markets.

This bold move, aimed at protecting domestic industries, is poised to increase costs for US businesses reliant on copper, such as those in construction, electronics, and renewable energy. The tariff’s immediate effect has been to heighten uncertainty, with investors bracing for potential retaliatory actions from trading partners.

Yet, despite this turbulence, equities in the European Union are holding strong. The STOXX Europe 600 Index has climbed over two per cent in the past week, fuelled by robust economic data and optimism about the region’s recovery. Sectors like technology and industrials are leading the charge, suggesting that European markets are, for now, shrugging off the broader trade war concerns.

Meanwhile, UK exporters are reaping the benefits of a weaker pound, which has depreciated by roughly 1.5 per cent against the dollar recently. This currency movement has made British goods more competitive internationally, boosting companies like Rolls-Royce and AstraZeneca, which have reported increased export orders. The FTSE 100 has seen modest gains as a result, though the shadow of escalating trade tensions looms large.

In my view, the resilience of EU and UK equities is impressive, but it’s tempered by the risk that Trump’s tariff policies could spark a broader trade conflict, potentially derailing these gains. Investors should keep a close eye on how these dynamics unfold, as the balance between regional strength and global uncertainty remains delicate.

Volatility: A calm before the storm?

Turning to volatility, the VIX, often dubbed the market’s “fear gauge,” has eased to 16.8, down from recent highs, signalling a period of relative calm. This decline suggests that investors are less worried about immediate market swings, possibly reassured by positive economic signals or the resolution of some geopolitical tensions.

The S&P 500’s expected move of ±0.44 per cent further supports this picture of stability, indicating a tight trading range for the index. Additionally, the flat volatility curve, where short-term and long-term expectations align, hints at a lack of imminent stress. Historically, a VIX below 20 is considered a sign of market confidence, and at 16.8, we’re in that territory.

However, I’m skeptical that this tranquility will last. A flat volatility curve can be a double-edged sword; while it reflects calm now, it’s often a precursor to sharp corrections when underlying risks such as Trump’s trade policies or upcoming macroeconomic events resurface.

My take is that this lull is a breather rather than a new normal. Investors might be lulled into complacency, but the potential for sudden disruptions remains high. Keeping an eye on catalysts like the FOMC minutes or unexpected tariff escalations will be critical in the days ahead.

Digital assets: Stability and divergence

The digital asset space presents a fascinating contrast to traditional markets, striking a balance between stability and selective growth. Bitcoin has held steady around US$109,000, a sign of its maturing role as a store of value amid broader market uncertainty. This resilience is bolstered by continued inflows into Bitcoin ETFs like IBIT, which have drawn institutional interest seeking exposure to cryptocurrencies.

Meanwhile, Ethereum has posted gains, trading at approximately US$2,557, likely driven by developments in decentralised finance (DeFi) and anticipation of network upgrades. However, not all digital assets are thriving equally, ETHA, an Ethereum-based ETF, has dipped, highlighting the nuanced dynamics within this sector.

Beyond the price action, there’s notable activity in the crypto-treasury space. Binance co-founder Changpeng Zhao’s family office, YZi Labs, is backing The BNB Treasury Company, a new firm offering exposure to BNB with plans to list on a major US exchange. With BNB trading at US$662.43, this move highlights the growing convergence of cryptocurrency and traditional finance.

Similarly, Donald Trump Jr.’s investment in Thumzup Media Corp, a social media marketing firm adopting Bitcoin as a treasury asset at US$111,178 per coin, reflects a broader trend of corporate Bitcoin adoption. Thumzup’s stock, trading at US$9.50 per share with Trump Jr. holding 350,000 shares valued at nearly US$3.3 million, illustrates how even non-tech firms are embracing crypto strategies.

Analysts also suggest Bitcoin may face a short-term dip below US$107,000 before its next rally, potentially hitting a Fair Value Gap between US$106,500 and US$106,200. This correction could be a strategic play by “smart money” to grab liquidity before pushing prices to new highs.

Fixed income: Yields on the rise

In the fixed income market, US Treasury yields are climbing ahead of the pivotal 10-year auction, with the benchmark 10-year yield reaching approximately 4.35 per cent. This uptick reflects investor expectations of tighter monetary policy from the Federal Reserve, as well as anticipation of higher interest rates to combat lingering inflation pressures.

Rising yields have broad implications: they make bonds more attractive compared to equities, potentially triggering a shift in investor allocations, and they increase borrowing costs, which could slow economic growth. The upcoming US$39 billion 10-year Notes auction at 1700 GMT will be a litmus test; strong demand could signal confidence in the US economy, while weak demand might raise red flags about yield sustainability.

The rise in yields is a double-edged sword. It reflects a healthy adjustment to economic realities, but it also risks stifling growth if rates rise too quickly. The auction’s outcome will be a key indicator of market sentiment, and I’d wager that investors are bracing for a bumpy ride as they balance yield opportunities against broader uncertainties.

Currencies: Dollar’s modest strength

The US dollar is enjoying modest gains against its G10 peers, buoyed by rising Treasury yields and its safe-haven status amid trade war jitters. It’s particularly strong against the Japanese yen and the euro, where dovish central bank policies have weakened local currencies.

However, these gains are restrained by concerns over the economic fallout from Trump’s tariffs, which could dampen US growth and, in turn, the dollar’s appeal. The pound’s 1.5 per cent drop, as noted earlier, is another piece of this puzzle, driven by export dynamics rather than broad dollar strength.

I see the dollar’s current position as a reflection of short-term flight-to-safety flows rather than a sustained bullish trend. If trade tensions escalate, the dollar could face headwinds, but for now, it’s holding its ground. Currency markets are notoriously sensitive to macro shifts, so the FOMC minutes and auction results could quickly alter this trajectory.

Commodities: Copper in the spotlight

Commodities are feeling the heat of Trump’s trade policies, with HG copper surging to a near 30 per cent premium over London prices following the 50 per cent tariff announcement.

Copper, a critical input for industries like electronics and construction, is now at the centre of supply chain concerns, with US manufacturers warning of price hikes and disruptions. This premium reflects anticipated shortages and higher costs, though global supply chains may eventually adapt to blunt the tariff’s impact.

In my view, copper’s surge is a classic case of policy-driven volatility. While the short-term effects are clear, the long-term picture depends on how producers and consumers adjust. For now, it’s a stark reminder of how quickly commodities can become geopolitical pawns.

Macro events and data: What’s next?

Two major macro events loom large: the US 10-year Notes auction and the release of the FOMC minutes from the June meeting at 1800 GMT. The auction will gauge investor appetite for US debt, while the minutes will offer clues about the Fed’s stance on rates and inflation, critical drivers of market expectations.

Elsewhere, macro data paints a mixed picture. US consumer inflation expectations for June 2025 have dropped to three per cent, a sign of cooling pressures, but commodity price expectations remain elevated for gas (4.2 per cent), medical care (9.3 per cent), college education (9.1 per cent), and rent (9.1 per cent). Taiwan’s trade surplus, meanwhile, jumped to US$12.07 billion, driven by exports of tech products, though exports to Europe declined.

Headlines amplify the noise: Trump’s tariff threats extend beyond copper to pharmaceuticals (up to 200 per cent, delayed 12-18 months) and India (an extra 10 per cent for BRICS ties), with no extensions on country-specific levies due in August. He’s also mulling a new tariff on the EU over tech disputes. These moves keep markets on edge, and I’d argue they’re a wildcard that could overshadow even the Fed’s signals if they materialise.

My take: Navigating the uncertainty

In wrapping up, the current market environment is a complex tapestry of opportunity and risk. Trump’s trade policies are the loudest drumbeat, shaking up commodities and equities while leaving volatility deceptively calm.

Digital assets are carving out a niche of stability, fixed income is adjusting to policy shifts, and currencies are caught in the crosscurrents. The upcoming macro events will either clarify or complicate this picture, but for now, caution seems warranted.

The markets’ resilience strikes me: EU equities, UK exporters, and Bitcoin are holding firm, but I can’t shake the feeling that we’re one tariff tweet away from a sharper correction. Investors would do well to remain nimble, closely monitor the data, and be prepared for surprises in this unpredictable landscape.

 

 

Source: https://e27.co/inflation-trade-and-tariffs-a-mixed-macro-picture-20250710/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Fed’s big choice: Save the economy or unleash inflation hell?

Fed’s big choice: Save the economy or unleash inflation hell?

Weakness in the US labour market has cast a shadow over investor confidence, while trade policy announcements and fiscal uncertainties in the UK add layers of ambiguity. At the same time, financial markets, from equities to cryptocurrencies, are sending mixed messages, reflecting both resilience and caution.

In this analysis, I’ll explore these factors in depth, weaving together the data and offering my perspective on what it all means for the global risk landscape.

A troubling signal from the US labour market

The US economy, often seen as the engine of global growth, is showing signs of faltering, particularly in its labour market. The latest ADP employment report revealed that private sector employers shed 33,000 jobs in June, a stark reversal from the consensus expectation of a 98,000 job gain.

This marks the first negative reading since March 2023, a period when the economy was still grappling with post-pandemic recovery challenges. With the nonfarm payrolls (NFP) release looming, this data has heightened anticipation and anxiety among investors and policymakers alike.

The significance of the ADP figure lies in its role as a leading indicator for the NFP, which provides a broader snapshot of employment trends. A weak NFP report could confirm fears of a slowing US economy, potentially signalling the end of the robust growth narrative that has supported markets in recent years.

This possibility is particularly concerning given the Federal Reserve’s delicate balancing act between taming inflation and sustaining economic expansion. If the labour market continues to soften, the Fed might lean toward a more accommodative stance, perhaps lowering interest rates, though this could risk reigniting inflationary pressures.

This labour market weakness is a pivotal driver of the subdued global risk sentiment. Investors are understandably jittery, as a faltering US economy could ripple across global markets, dampening demand and weighing on corporate earnings.

The uptick in gold prices to US$3,357 per ounce and the slight dip in the US Dollar Index suggest that some are already positioning for a risk-off environment. The stakes are high, and the NFP release will likely be a defining moment for market sentiment in the near term.

Trade policy: A glimmer of hope amid uncertainty

On the trade front, President Trump’s announcement of a deal with Vietnam has sparked a flicker of optimism. The prospect of a new trade agreement could ease some of the tensions that have plagued global commerce, particularly in the context of the US-China rivalry.

Vietnam’s growing role as a manufacturing hub makes it an appealing partner for diversifying supply chains, potentially reducing reliance on any single country and bolstering economic resilience. Yet, this optimism is tempered by significant uncertainty. At the time of writing, no official confirmation has come from Vietnamese authorities, and details about the deal remain frustratingly scarce.

Trump’s track record of issuing bold, unilateral trade proclamations, sometimes followed by protracted negotiations or reversals, further adds to the skepticism. Without clarity on the agreement’s scope, timeline, or enforceability, it’s difficult for markets to embrace this development as a game-changer fully.

The trade announcement is a double-edged sword. On one hand, it hints at progress in stabilising global trade dynamics, which could lift risk sentiment if substantiated. On the other hand, the lack of concrete information leaves it as more of a headline than a foundation for confidence. Until Vietnam weighs in and specifics emerge, this remains a wildcard in the broader risk equation.

UK fiscal woes stir global ripples

Across the Atlantic, the UK is grappling with its own set of challenges that are reverberating through global markets. The government’s abrupt reversal on welfare reforms has reignited concerns about fiscal stability, amplifying political uncertainty at a time when clarity is sorely needed.

This policy shift triggered a sharp bear-steepening in gilt yields, a technical term that describes a scenario where long-term yields rise faster than short-term ones. In practical terms, it signals growing investor unease about the UK’s fiscal health and the potential for higher borrowing costs.

This market reaction hasn’t stayed confined to British shores. The upward pressure on gilt yields has contributed to a broader rise in global bond yields, including US Treasuries, where the 10-year yield climbed to 4.277 per cent and the two-year yield reached 3.785 per cent. This interconnectedness underscores how fiscal instability in one major economy can unsettle others, particularly when confidence is already fragile.

The UK’s predicament is a sleeper issue in the global risk narrative. While it may not dominate headlines like US labour data or trade talks, its implications are profound.

A sustained loss of faith in the UK’s fiscal management could erode its standing in global markets, prompting investors to shift toward safer assets and further dampen risk appetite. The bear-steepening in gilts is a warning shot, one that global markets would be wise not to ignore.

Markets reflect a tug-of-war

Overnight, US equity markets offered a mixed bag of results that mirror the broader uncertainty. The S&P 500 rose by 0.5 per cent and the NASDAQ gained a more robust 0.94 per cent, buoyed by strength in technology stocks.

Meanwhile, the Dow Jones slipped by a modest 0.02 per cent, hinting at uneven investor sentiment across sectors. This divergence suggests that while some corners of the market remain optimistic, perhaps driven by innovation or earnings resilience, others are more guarded.

The rise in US Treasury yields and the movements in commodity prices further illustrate this cautious mood. The 10-year Treasury yield rose by 3.5 basis points, and the two-year yield increased by 1.2 basis points, reflecting expectations of tighter financial conditions or lingering concerns about inflation.

Gold, a classic safe-haven asset, climbed 0.6 per cent to US$3,357 per ounce. In comparison, Brent crude surged three per cent, its most significant jump in two weeks, after Iran announced it was suspending cooperation with the UN atomic agency, stoking fears of oil supply disruptions.

In my analysis, these market movements reveal a tug-of-war between risk-on and risk-off impulses. The equity gains suggest some investors are betting on resilience, while the rise in yields and gold prices points to underlying worries about economic stability. Brent crude’s leap adds another layer of complexity, as higher energy costs could fuel inflation, complicating central banks’ efforts to manage growth and prices.

Bitcoin’s highs meet trader caution

In the cryptocurrency realm, Bitcoin is making waves, surging past US$109,000 and trading just two per cent below its all-time high. This rally coincided with monetary expansion in the eurozone and the softening of the US labour market, factors that often bolster Bitcoin’s appeal as an inflation hedge or alternative asset.

Yet, derivatives data tell a more cautious tale. The Bitcoin futures premium, a gauge of trader sentiment, remains below the five per cent neutral threshold, inching up from four per cent but still far from bullish territory.

This hesitancy is echoed in other metrics, like the USDT discount in China and outflows from spot Bitcoin ETFs, which highlight investor wariness amid global trade tensions. Despite the price surge, traders seem unconvinced of its staying power, perhaps mindful of past volatility or macroeconomic headwinds.

A standout development is BlackRock’s iShares Bitcoin Trust ETF (IBIT) outpacing its iShares Core S&P 500 ETF (IVV) in annual fee revenue. With US$75 billion in assets, IBIT generates US$187.2 million yearly at a 0.25 per cent expense ratio, edging out IVV’s US$187.1 million from US$624 billion at 0.03 per cent. This shift, driven by steady inflows over 17 of the last 18 months, underscores Bitcoin’s growing institutional allure.

Bitcoin’s story encapsulates the broader risk sentiment. Its price reflects optimism and speculative fervor, but the cautious derivatives data and ETF outflows suggest a market on edge, awaiting clearer signals. BlackRock’s revenue milestone is a watershed moment, hinting at a future where cryptocurrencies rival traditional assets in prominence.

Bottom line

Pulling these threads together, the global risk sentiment feels like a tightrope walk, balanced between tentative hope and palpable concern. The US labor market’s stumble is a red flag, potentially foreshadowing a more challenging road ahead if the NFP disappoints.

Trade optimism from the Vietnam deal is a bright spot, but its vagueness keeps it from being a game-changer. The UK’s fiscal turbulence and rising yields exacerbate the unease, while markets fluctuate between gains and safe-haven moves.

For me, the overriding sense is one of caution. The mixed signals —equity advances, gold’s rise, and Bitcoin’s cautious rally — suggest that investors are hedging their bets and braced for volatility. The NFP release will be a litmus test, but even beyond that, clarity on trade and fiscal fronts will be key to shifting this subdued mood.

 

Source: https://e27.co/feds-big-choice-save-the-economy-or-unleash-inflation-hell-20250703/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

The crypto catalyst: How inflation, rates, and risk sentiment shape Bitcoin’s path

The crypto catalyst: How inflation, rates, and risk sentiment shape Bitcoin’s path

Bitcoin, the world’s pioneering and largest cryptocurrency, has been riding a wave of momentum in recent days, hovering tantalisingly close to its all-time high of just under US$112,000, a peak it reached on May 22. As of Wednesday morning, Bitcoin’s price surged to US$110,400 before retreating slightly to US$108,800, mirroring a broader pullback in US stock markets.

This performance comes against a complex backdrop of cooling US inflation data, escalating trade tensions, and shifting global risk sentiment. With the cryptocurrency staging a decisive breakout above a technical flag pattern earlier this week, investors are eyeing potential new highs, even as macroeconomic uncertainties loom large. Let’s take a look.

A technical breakout signals bullish momentum

From a technical analysis standpoint, Bitcoin’s recent price action paints an encouraging picture for bulls. Earlier this week, the cryptocurrency broke out above a flag pattern—a chart formation that typically emerges after a sharp price move, signalling a period of consolidation before the trend resumes.

In this case, the breakout suggests that Bitcoin is poised for another leg higher, building on its rally over the past week. Key resistance levels to watch are US$112,000—the previous record high—and US$137,000, which could serve as the next major target if upward momentum persists.

On the flip side, support levels at US$107,000 and US$100,000 provide critical floors. Should Bitcoin slip below US$107,000, it could trigger a deeper correction, potentially testing the US$100,000 mark. For now, the breakout above the flag pattern reinforces a bullish narrative, but these key levels will determine whether Bitcoin can sustain its climb or face a near-term setback.

Technical analysis alone doesn’t tell the whole story, but it provides a roadmap for interpreting price movements. The flag pattern’s bullish implication is bolstered by Bitcoin’s 16 per cent gain since the start of the year, a performance that has outpaced major US stock indices, such as the S&P 500 and Nasdaq, which ended Wednesday down 0.27 per cent and 0.50 per cent, respectively.

This divergence highlights Bitcoin’s growing appeal as an alternative asset, even as traditional markets grapple with renewed trade tensions sparked by President Donald Trump’s pledge to set unilateral tariff rates within two weeks.

Fundamental drivers: From political support to institutional adoption

Beyond the charts, a confluence of fundamental factors is underpinning Bitcoin’s resilience. One of the most striking developments is the cryptocurrency’s newfound legitimacy, driven in part by political support. President Trump, who was once a skeptic of digital currencies, has recently expressed enthusiasm for cryptocurrencies, alongside several allies in Congress.

This shift could pave the way for more favorable regulatory frameworks, a stark contrast to the early days when Bitcoin was dismissed as a speculative oddity. While Trump’s tariff threats have rattled global markets, his pro-crypto stance offers a counterbalancing positive for Bitcoin, potentially boosting its long-term adoption.

Institutional interest is another powerful tailwind. Publicly traded companies like Strategy (MSTR) have been aggressively accumulating Bitcoin, using proceeds from equity sales to bolster their corporate treasuries with the digital asset.

This trend reflects a growing perception of Bitcoin as a store of value and a hedge against inflation, particularly in an environment where traditional safe havens like US Treasuries are seeing yields slip—the 10-year yield fell 6 basis points to 4.12 per cent on Wednesday following cooler-than-expected inflation data.

Meanwhile, Bitcoin exchange-traded funds (ETFs) have seen their total assets balloon to US$132 billion this month, up from US$91 billion in early April. This surge highlights the growing demand from institutional investors, who now have regulated avenues to gain exposure to Bitcoin without directly holding the asset.

Perhaps most telling is the steady decline in Bitcoin held on centralised exchanges. Since the beginning of 2025, exchange balances have dropped 14 per cent, reaching 2.5 million BTC—a level last seen in August 2022. This trend signals growing investor confidence and a shift toward long-term holding.

When investors move Bitcoin into cold storage or custodial wallets, it reduces the liquid supply available for trading, limiting short-term sell pressure. Large entities, including institutional players and so-called “whales,” often withdraw coins after buying, suggesting accumulation is underway. With fewer coins readily available to flood the market, this dynamic could amplify upward pressure on Bitcoin’s price, especially if demand continues to climb.

Macro context: Inflation, rates, and risk sentiment

Bitcoin’s recent surge hasn’t occurred in a vacuum—it’s been fuelled by encouraging macroeconomic signals. On Wednesday, US CPI and Core CPI data revealed a modest 0.1 per cent increase in May, weaker than economists had forecast. This softer-than-expected inflation print suggests that companies are absorbing higher tariff costs rather than passing them on to consumers, easing inflationary pressures.

For investors, this is a green light: cooler inflation strengthens the case for the Federal Reserve to cut interest rates as early as September. Lower rates typically diminish the appeal of yield-bearing assets, such as bonds, driving capital toward riskier investments, including equities and cryptocurrencies. Gold, a traditional inflation hedge, edged up 0.1 per cent to US$3,324.72 per ounce on the news, while Bitcoin’s rally reflects a similar flight to alternative stores of value.

Yet, the macroeconomic picture isn’t uniformly rosy. Global risk sentiment took a hit as Trump’s tariff threats dialed up trade tensions, sending US stocks lower and dragging the US Dollar Index down 0.47 per cent to 98.63. Asian equity markets were mixed on Thursday morning, and US equity futures pointed to a lower open, signalling persistent unease.

In commodities, Brent crude jumped 4.3 per cent to US$69.77 per barrel amid escalating US-Iran tensions, highlighting geopolitical risks that could ripple across asset classes. Bitcoin, often touted as “digital gold,” may benefit from this uncertainty, but its correlation with risk assets, such as stocks, suggests it’s not immune to broader market sell-offs.

Risks and opportunities: A balanced perspective

The outlook for Bitcoin remains overwhelmingly bullish, but it’s not without caveats. On the positive side, the technical breakout, institutional adoption, and declining exchange balances form a robust foundation for further gains.

The prospect of Fed rate cuts, bolstered by Wednesday’s inflation data, adds fuel to the fire, as does the growing political and corporate embrace of cryptocurrencies. If Bitcoin can clear the US$112,000 hurdle, US$137,000 becomes a plausible target, potentially marking a new chapter in its ascent.

However, risks loom on the horizon. Regulatory uncertainty remains a wildcard—while political support is growing, the specifics of future legislation are unclear, and adverse rules could dampen enthusiasm. Bitcoin’s high volatility is another concern; sharp price swings are par for the course, and a sudden shift in risk sentiment could trigger a pullback.

The broader economic context adds complexity: Trump’s tariff plans could disrupt global trade, and a resulting downturn might drag risk assets, including Bitcoin, lower. Finally, despite its gains, Bitcoin’s long-term value proposition is still debated. Critics argue it lacks intrinsic value, while proponents see it as a hedge against fiat currency debasement. This tension keeps the asset class polarising.

My point of view: Optimism tempered by caution

Tracking Bitcoin’s evolution, I’m struck by how far it’s come—from a fringe experiment to a mainstream contender. Its recent performance reflects a maturing asset class, buoyed by institutional credibility and macroeconomic tailwinds.

I’m optimistic about its near-term prospects; the technical breakout and fundamental drivers suggest more upside, especially if the Fed pivots to rate cuts. The declining exchange balances, in particular, strike me as a powerful signal of conviction—investors aren’t just speculating, they’re committing for the long haul.

That said, I can’t ignore the risks. Bitcoin’s volatility is a double-edged sword, and its sensitivity to global risk sentiment means it could falter if trade tensions escalate or economic clouds gather. For all its progress, it’s still a young asset, and its fate hinges on factors beyond its control—regulation, geopolitics, and market psychology among them.

My view is one of cautious optimism: Bitcoin has the wind at its back, but investors should tread carefully, balancing its potential rewards against its inherent uncertainties.

 

Source: https://e27.co/the-crypto-catalyst-how-inflation-rates-and-risk-sentiment-shape-bitcoin-path-20250612/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j