- Bitcoin declined for the third consecutive day due to investor concerns over U.S. trade tariffs and the Federal Reserve’s interest rate stance, while Hong Kong pushes forward with a regulated stablecoin initiative.
- Despite the downturn, Standard Chartered remains bullish, predicting Bitcoin could reach $500,000, driven by growing institutional and sovereign investments.
Bitcoin prices continued their downward trajectory on Tuesday, marking a third consecutive day of decline as investors grappled with uncertainty over U.S. trade tariffs and the Federal Reserve’s interest rate policy. The cryptocurrency edged 0.3% lower to $95,472 by mid-afternoon trading.
Market Jitters Over US Tariffs and Interest Rates
The latest dip in Bitcoin’s value comes as investors remain wary of potential economic shifts triggered by U.S. trade policies. The Trump administration has hinted at imposing new reciprocal tariffs on countries that tax U.S. imports, raising fears of escalating trade tensions. A slowdown in global economic growth could weaken investor sentiment toward risk assets like Bitcoin, which is often seen as a barometer of market risk appetite.
Adding to the cautious atmosphere, the Federal Reserve’s stance on interest rates remains a critical factor. Last week’s U.S. Consumer Price Index (CPI) report indicated inflation levels above the central bank’s 2% target, leading to speculation that interest rates could stay higher for longer. Since Bitcoin does not generate yield, higher interest rates often diminish its appeal in favor of traditional investments that offer more stable returns.
Hong Kong’s Push for a Regulated Stablecoin
While Bitcoin’s price struggles, Hong Kong is making strides in cryptocurrency innovation. A collaboration between Standard Chartered Bank (Hong Kong), Animoca Brands, and Hong Kong Telecommunications aims to introduce a regulated Hong Kong dollar-backed stablecoin. The initiative seeks to enhance domestic and cross-border transactions using blockchain technology.
Stablecoins are designed to maintain a fixed value relative to a fiat currency, making them a crucial bridge between digital assets and traditional finance. Hong Kong’s policymakers are actively positioning the city as a leading cryptocurrency hub, boosting investor confidence in digital assets despite recent market downturns.
Standard Chartered Stands by $500K Bitcoin Price Target
Despite the current price slump, Standard Chartered remains optimistic about Bitcoin’s long-term growth. The bank reaffirmed its bullish $500,000 price target, citing increased participation from institutional investors, banks, and even sovereign entities. Analysts believe Bitcoin could hit this milestone before the end of Donald Trump’s potential second term, provided new buyers continue entering the market.
Spot Bitcoin ETFs have already absorbed significant investments, with 499,000 BTC purchased in 2024 alone. Additionally, Abu Dhabi’s sovereign wealth fund recently disclosed holdings of 4,700 BTC in BlackRock’s IBIT ETF, signaling growing institutional interest in cryptocurrency. Standard Chartered expects this trend to continue, with pension funds and central banks potentially joining the Bitcoin market as long-term investors.
Altcoins Take a Bigger Hit
While Bitcoin’s decline was relatively modest, altcoins suffered steeper losses. Ether plunged nearly 5% to $2,680, while XRP fell 5.3% to $2.55. Solana and Polygon dropped more than 9% each, with Cardano not far behind at 6.3% lower. Meme tokens were also hit hard, as Dogecoin sank 6.8% and the politically-themed $TRUMP token dropped 9.3%.
Looking Ahead
Bitcoin’s price movement in the coming days will largely depend on developments in U.S. trade policy and Federal Reserve decisions. If macroeconomic uncertainties persist, risk-averse investors may continue shifting funds away from cryptocurrencies. However, with institutional and sovereign players steadily entering the space, long-term Bitcoin prospects remain promising.
