Simply put
- Beijing and Washington discussed extending the 90-day tariff suspension but could not finalize an agreement.
- Bitcoin’s price reached $118,000 as traders interpreted macro policy signals.
- Attention will shift to the Fed meeting on Wednesday, with market expectations for interest rate cuts in September.
Bitcoin and the wider cryptocurrency market remained stagnant on Tuesday, despite ongoing diplomatic discussions in Stockholm between the US and China.
Li Chenggang, China’s chief trade representative, reported that both nations intended to explore an extension of the tariff suspension past the August 12 deadline. However, U.S. Treasury Secretary Scott Bescent mentioned that while they discussed the possibility, a decision had not yet been made.
The current 90-day tariff pause continues, with a 30% tariff on Chinese imports to the US and a 10% tariff on US goods entering China.
There is no formal agenda for these discussions, but President Trump hinted at a possible meeting with Chinese President Xi Jinping, saying, “I might go to China at the invitation of President Xi.”
Even with a positive tone, the trade dynamics between the US and China feel uncertain, leading the cryptocurrency market to brace itself for upcoming developments.
“This week is crucial for macroeconomic factors,” stated Daniel Liu, CEO of Republic Technology. “A specific macro direction can significantly influence crypto movements.”
Bitcoin prices pulled back slightly after the Stockholm talks, ending Tuesday down from a high of $119,258.
The effect of trade policies on risk assets has been a topic of discussion lately, especially given Trump’s fluctuating stances on tariffs.
Economists have pointed out that proposed cleaning fees by the White House could worsen the Federal Reserve’s battle against inflation.
All eyes are now on the Federal Reserve’s interest rate decision set for 2 PM on Wednesday. Market estimates for rate cuts in July are at 3.1%, while September possibilities show a 65.4% chance of reduction.
Generally, lower interest rates create a better environment for higher-risk investments, as they are more appealing compared to the low returns from traditional bonds.
Traders will be analyzing Chair Jerome Powell’s remarks during the upcoming FOMC meeting. Liu noted that signs of “economic debilitating” conditions might enhance the chances of faster cuts.
