Bitcoin rose on Thursday as demand on high-risk assets rebounded on optimism about US trade talks with allies, while investors assess the Federal Reserve’s latest policy meeting.

On the trade front, the markets were boosted by reports about a meeting between US Treasury Secretary Scott Bessent and Chinese officials in Switzerland to discuss the tariffs and a potential trade agreement.

Bessent cautioned that this step aims at de-escalation and not reaching a full trade deal.

Trump’s Son

US President Trump’s son Eric announced that he owns a “large amount” of bitcoin, asserting his faith in the future of this cryptocurrency during his participation at the TOKEN2049 event in Dubai, describing bitcoin as “digital gold” and expecting long-term growth in value.

Even as Eric hasn’t revealed the exact sum of this investment, it shows the commitment of the Trump’s family towards cryptocurrencies, which is a notable conversion after previous criticism towards the industry.

Trump has repeatedly expressed his support for crypto assets, considering it a strategic advantage for the US over China, and signing an executive order in March to start joining seized bitcoin to the US strategic reserve. 

Trump also appointed Paul Atkins as the new SEC chief and tasked him with drawing up new regulations that support crypto innovations, in a radical departure from the previous administration’s stance.

Conflict of Interest 

Trump however has faced criticism about a potential conflict of interest, due to his company World Liberty Financial’s clear connections to the crypto industry, and especially after Trump launched his own meme coin, which triggered calls for investigations from the Senate Democrats.

The Fed

In a step that wasn’t surprising, the Fed decided to maintain interest  rates unchanged at below 4.5%, due to ongoing economic uncertainty.

The statements asserted the FOMC continues to monitor risks closely, and believes that unemployment and higher inflation risks are on the upside.

The statement hinted that tariffs threaten higher prices and could slow growth, which opens the door to the scenario of inflationary recession.

Most Fed policymakers believe the central bank is in a good position to hold off modifying policies until clear data presents itself.

Bitcoin

Bitcoin rose 2.5% on Coinmarketcap as of 13:49 GMT to $99.5 thousand.

The US dollar rose in European trade on Thursday against a basket of major rivals, expanding the gains for the second straight session as concerns about a US recession receded while Trump announced a major trade deal.

The Federal Reserve maintained interest rates unchanged for the third straight meeting, pointing to rising inflation and unemployment concerns due to tariffs.

The Index

The dollar index rose 0.35% today to 100.21, with a session-low at 99.61.

On Wednesday, the index rose 0.5%, the first profit in four sessions following the Federal Reserve’s policy decisions.

Trade Developments 

US President Donald Trump said he’ll announce a big trade deal with a “highly respectable country” in a new conference later today, the first of many such deals.

It’s likely to be a trade deal with the UK, which itself reached a free trade deal with India last week.

The Fed

In a step that wasn’t surprising, the Fed decided to maintain interest  rates unchanged at below 4.5%, due to ongoing economic uncertainty.

The statements asserted the FOMC continues to monitor risks closely, and believes that unemployment and higher inflation risks are on the upside.

The statement hinted that tariffs threaten higher prices and could slow growth, which opens the door to the scenario of inflationary recession.

Most Fed policymakers believe the central bank is in a good position to hold off modifying policies until clear data presents itself.

The Fed’s decision comes as the US administration engages in intense talks with trade partners to reach deals within the 90-day pause on reciprocal tariffs that Trump provided.

Powell

Fed Chair Jerome Powell provided important remarks following the meeting:

-He expects higher short-term inflation

-Tariffs are the main mover of inflation forecasts

-Tariffs so far are much larger than expected

-Sustained tariffs will lead to higher inflation and less employment 

-Fed remains in a good position before changing policies

-Fed isn’t in a rush to cut interest rates

-He opened the door for more interest rate cuts this year is suitable

US Rates

Following the Fed meeting and according to the Fedwatch tool, the odds of a June 0.25% interest rate cut fell from 32% to 20%.

The odds of a July interest rate cut also fell from 71% to 66%.

The Bank of England revealed the vote count on interest rates today, with a 7-2 margin in favor of a 0.25% rate cut, while analysts expected a unanimous vote, and compared to the previous meeting's 8-1 vote in favor of holding rates.

The Bank of England cuts interest rates by 25 basis points to 4.25%, the lowest since March 2023, matching expectations.