Bitcoin Surges 1.5% to $85,000 Amid Tariff Policy Shifts

Bitcoin's price surged to approximately $85,000 on Monday, reflecting a 1.5% increase over the past day. This rise comes as investors assess the potential economic impact of the White House's tariff policies, which have sparked concerns about inflation and recession. The leading cryptocurrency's price movement was influenced by the White House's indication that certain electronics, including computer chips and smartphones, would be exempt from "reciprocal" levies, which initially boosted Bitcoin's value. However, the price softened on Sunday after President Donald Trump clarified that other levies would still be applied to electronics, indicating that the tariff exemptions were not as comprehensive as initially hoped.

Consumer inflation expectations have intensified, with a survey released on Monday showing that consumers anticipate inflation to reach 3.6% a year from now. This heightened concern about inflation is reflected in the Federal Reserve Bank of New York’s monthly Survey of Consumer Expectations, which also revealed that 44% of respondents believe the unemployment rate will be higher a year from now. This level of economic anxiety is the highest since April 2020, particularly among households with annual incomes below $50,000, where there was a notable increase in the perceived probability of job loss.

Market participants are closely monitoring the economic landscape, with particular attention to the Federal Reserve's stance on potential rate cuts and recession risks. According to a research analyst, the unveiling of the "Liberation Day" tariffs initially sparked fears of a significant economic contraction, leading to expectations of multiple rate cuts this year. However, after President Trump announced a 90-day pause on most tariffs, the odds of an incoming recession decreased, along with expectations of rate cuts. Despite this, market participants are still pricing in more cuts now than before the "Liberation Day" announcement, indicating ongoing uncertainty about the economic outlook.

The analyst noted that if the global economic situation appears dire, central banks may implement more stimulative policies. This could potentially benefit cryptocurrencies in the medium term, although the short-term volatility remains a concern. The rise in Bitcoin's price amid these economic uncertainties underscores its status as a potential hedge against inflation and economic instability, as investors seek alternative assets to protect their wealth.