Bitcoin Strengthens After Trump Extends Tariff Pause
Date: 2025-05-26 Author: Henry Casey Categories: CRYPTO PAYMENTS
Bitcoin hit $109,600 on Sunday evening after President Trump announced his decision not to impose 50 percent tariffs on products from the European Union. This gave market participants a reason for optimism amid ongoing trade tensions between the US and the EU.
Trump's phone call with European Commission President Ursula von der Leyen was a key moment, during which the European side requested additional time to complete the negotiations. The new deadline is now set for July 9.
Against this backdrop, futures on the main US indices showed confident growth: the S&P 500 added 0.9%, the Dow - 0.8%, and the Nasdaq-100 - 1%. Market participants are hoping that the extension of the talks will ease trade pressure, at least in the short term.
Trump initially proposed a 20% tariff in April, later reducing it to 10%. However, on Friday, he again threatened to raise the rate to 50% if there was no progress in the dialogue. By the end of the weekend, he postponed the implementation of this threat, which immediately affected the dynamics of assets.
This decision also had a positive impact on the crypto market. According to Ryan McMillen of Merkle Tree Capital, Bitcoin has been repeating the behavior of gold in recent months, acting as a hedge against inflation and instability. He believes that Bitcoin can continue to grow and reach $ 120,000 in the near future.
Pavel Hundal of Swyftx shares a similar point of view. He noted that options on Derebit at $ 120,000 for June contracts already cover more than half a billion dollars in nominal value.
The EU, which shipped more than $600 billion in goods to the US last year, has suspended plans to impose $23 billion in retaliatory tariffs and is in talks on potential measures worth another $95 billion.
The crypto market was generally stable, with Ethereum trading near $2,550, and Solana and Avalanche up between 1% and 2%.
Investors continue to assess geopolitical risks amid an influx of institutional capital and expectations of US inflation data due out on Friday.
Bitcoin's 2% decline in April was driven by tariff concerns, after which traders reduced their use of leverage. However, analysts are confident that the current rally is on a more solid footing than in previous cycles.
According to QCP Capital, structural demand for crypto assets is supported by a favorable regulatory environment in the US and an influx of institutional investment, including ETFs and spot trades.
