Former President Donald Trump announced a year-long agreement with China, negotiating tariff reductions at the APEC summit, impacting global markets.
The agreement boosts market stability, affecting Bitcoin and Ethereum prices. Institutional investors show renewed risk interest, as Federal Reserve policy changes influence market liquidity.
The recent agreement between Donald Trump and Xi Jinping has led to changes in trade tariffs and resolution of rare earth export issues. This interaction at the APEC summit has significant implications for global economic stability and market behaviors.
Donald Trump confirmed the one-year agreement to lower tariffs, while Xi Jinping agreed to address fentanyl precursors. “It was a one-year agreement that would be extended… the rare earths issue has been settled and there would be no more roadblocks on them,” Trump stated. These actions aim to ease tensions and have ramifications on financial markets, including cryptocurrency fluctuations.
Crypto Volatility Follows Trade Deal Announcement
Bitcoin and Ethereum showed volatility post-announcement, with Bitcoin briefly dropping to $108,000 but recovering soon after. Ethereum rose, indicating heightened market interest in crypto assets. Institutional investments have targeted these prominent cryptocurrencies amid increasing risk appetite.
The Federal Reserve’s move to cut rates and end quantitative tightening by December is expected to spur risk-taking behavior among crypto traders. Historically, liquidity shifts have impacted assets like BTC and ETH, prompting yield-seeking into DeFi protocols and tokens.
Fed’s Policies Could Boost Crypto Liquidity
Past US-China trade negotiations have caused short-term market fluctuations followed by rebounds once clarity is achieved. During previous rallies, major cryptocurrencies like Bitcoin and Ethereum were the first to react to macroeconomic changes.
Expert analyses indicate that recent Federal Reserve decisions will increase market liquidity, potentially leading to renewed interest in Bitcoin and Ethereum. These macroeconomic factors could influence broader market trends and trader strategies in the cryptocurrency space.
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