What happened in crypto today? Rate cuts, regulation, and the impact on Bitcoin
- The crypto market showed resilience, expecting long-term gains from Trump’s trade war.
- Bitcoin holds strong as pro-crypto sentiment builds in Washington.
Following the highly anticipated “Liberation Day” tariffs, the cryptocurrency market has experienced notable volatility, driven by geopolitical developments and regulatory actions.
As the dominant asset by market capitalization, Bitcoin [BTC] continues to set the tone for broader crypto market sentiment.
Trading at $84,121 at press time, BTC registered a modest 0.65% increase from the previous close.
Despite concerns over a potential “market-wide” correction, the anticipated sell-off failed to materialize. As a result, the market remains in the green, maintaining its upward trajectory.
What happened in crypto today?
Let’s take a step back to analyze the aftermath of the trade war. The Volatility Index (VIX) spiked to an eight-month high, reflecting a surge in market uncertainty and risk appetite.
All three major U.S. stock indices saw massive sell-offs, erasing trillions in market capitalization, with the Magnificent Seven stocks trading 34% below their respective all-time highs.
Meanwhile, the 10-year Treasury yield (the interest rate the U.S. government pays to borrow money) retraced to pre-election levels, dropping by -90 basis points (bps).
Typically, when yields fall, investors often move money into safe assets like Treasury bonds, anticipating slower economic growth in Q2.
Source: Trading Economics
In response, market participants quickly priced in a 20% probability of three rate cuts in 2025, up from previous expectations of two.
Why? Analysts speculate that U.S. aggregate demand could slow as the effects of the tariffs take hold, which could prompt the Federal Reserve to cut rates. This would allow more cheap capital to flow into the market.
In the crypto market, investors clearly identified long-term value, particularly in Bitcoin, given the shifting economic landscape. Unlike equities, cryptocurrencies showed resilience.
Bitcoin dominance saw a 0.30% uptick following the announcement, reflecting a shift in investor sentiment and a flight to “digital assets” as an alternative store of value.
Crypto market optimism amid regulatory shift
The U.S. Senate Banking Committee has approved Paul Atkins as the next SEC Chair in a 13-11 vote, setting the stage for a major shift in crypto regulation.
Known for his pro-market approach, Atkins is expected to steer the SEC away from strict enforcement and toward clearer, industry-friendly policies. This shift has reinforced long-term investor confidence in crypto markets.
Bitcoin remains above $80k, major altcoins are holding critical support levels, and the high probability of Federal Reserve quantitative easing — combined with a regulatory shift at the SEC — has allowed crypto markets to absorb recent macro volatility.
Source: CoinMarketCap
Should these conditions persist, risk appetite may increase, setting the stage for stronger institutional inflows and a potential market-wide rally in the coming quarters.