Bitcoin posts biggest gains of the year as markets eye Trump’s crypto policies

Bitcoin surged to its largest gains of the year, fueled by U.S. inflation data that revived hopes for Federal Reserve interest rate cuts and boosted global markets.

The cryptocurrency was trading at $100,420 as of 4:08 a.m. Thursday in Dubai, following a more than 3% rise after the U.S. Bureau of Labor Statistics reported a slowdown in core consumer price growth. Ethereum and XRP saw even sharper increases.

The inflation report reignited expectations of a rate cut by the Federal Reserve as early as July, lifting sentiment across stocks, bonds, and digital assets.

All eyes on Trump’s crypto-friendly agenda

Attention is now on President-elect Donald Trump’s policies, with analysts anticipating measures to bolster the cryptocurrency sector after his Jan. 20 inauguration.

Trump has pledged to position the U.S. as a global hub for cryptocurrency innovation, including a proposal to create a national Bitcoin reserve. However, market participants are weighing potential risks, including inflationary tariffs and stricter immigration policies, against his pro-crypto agenda.

Profit-taking or the next rally?

Bitcoin’s 50% rally since Trump’s election, which pushed it to an all-time high of $108,316 last month, has sparked concerns about profit-taking as he takes office.

Trump has a series of executive orders ready for immediate implementation, some of which are uniquely supportive of crypto assets,” Cosmo Jiang, portfolio manager at Pantera Capital, told Bloomberg. “While we may see short-term selling pressure, those who exit now could miss out on significant long-term gains.

As optimism grows around Trump’s crypto policies and potential Fed rate cuts, Bitcoin is expected to remain volatile, keeping traders and investors on edge.