- A market analyst believes that the recent drop in CPI data and a pause on tariffs do little to change the long-term bearish trend in crypto.
- Experts from two financial firms suggest that a collapse in the bond market combined with low CPI could improve long-term sentiment for Bitcoin.
- Bitcoin experienced a 3% decline on Thursday, slipping below $80,000, despite the lower-than-expected CPI figures and President Trump’s announcement of a 90-day tariff hiatus.
On Thursday, Bitcoin (BTC) sank below $80,000, even though the US Consumer Price Index (CPI) data came in lower than anticipated and President Donald Trump introduced a 90-day pause on reciprocal tariffs involving 75 nations. Various analysts discussed how these developments might influence the crypto market.
Bitcoin remains in troubled waters despite tariff pause and decreased CPI
The value of Bitcoin fell by 3% on Thursday, dropping below the $80,000 mark, as the overall cryptocurrency market saw a decline exceeding 5%. This downturn coincides with the release of March’s CPI data, which revealed a lower-than-expected rate of 2.4%, down from 2.8% in February, along with President Trump’s 90-day halt on tariffs.
An analyst pointed out that the latest CPI figures might not accurately reflect the larger economic landscape. They argued that the current CPI data may underestimate future inflation, suggesting that inventory buffers could delay the true impact of tariffs.
The analyst went on to explain that the existing macroeconomic climate casts a bearish outlook for digital assets, as delayed inflation, ongoing trade difficulties, and indicators of recession could dampen investor enthusiasm.
“Despite temporary stability, the macro environment remains bearish for crypto in the long run,” the analyst noted in a report.
Moreover, analysts from a trading platform remarked on Thursday that while the tariff pause may have alleviated some market tensions following a tumultuous first quarter, it is not a sustainable solution. They emphasized that while these conditions might temporarily support crypto, a more significant catalyst is necessary to draw substantial capital back into Bitcoin.
“Bitcoin might see some advantage from reduced macro pressures, but the market is likely to await clearer signals — such as changes in the Fed’s stance or improved liquidity conditions — before making a pronounced return to crypto investments,” the analysts stated.
Data reveals that capital inflows into Bitcoin have plummeted by over 90% since the year began, decreasing from a peak of $100 billion to roughly $6 billion.
Global market instability could lead investors to Bitcoin
Nonetheless, the CEO of a financial firm argued that recent macroeconomic shifts — including low inflation rates and a drastic downturn in the bond market — show genuine strain within the traditional financial system. They asserted that this fatigue could lead to a significant capital shift from debt markets into cryptocurrencies as investors may begin to lose faith in traditional assets as safe havens.
“Over the long term, this atmosphere intensifies the need for crypto infrastructure: around-the-clock capabilities, programmable treasuries, and monetary systems that won’t be swayed by political agendas,” the CEO stated.
An additional expert echoed this view, suggesting that macroeconomic pressures might reveal structural issues in markets. They noted that this could foster a decline in trust toward fiat currencies and position Bitcoin to gain traction at the expense of traditional investments.
“In times of fiscal dominance and rising geopolitical tensions, tangible assets like Bitcoin stand to gain as investors seek stability outside conventional frameworks,” they shared.
The COO of a Bitcoin services company expressed similar sentiments, emphasizing that the combination of waning inflation, a tariff freeze, and a declining bond market causes Bitcoin to appear “more like a long-term hedge than a speculative risk.”
“Declining inflation alleviates some pressure, but the broader narrative hinges on increasing skepticism toward traditional systems. Both investors and everyday consumers are searching for something more stable, and Bitcoin is assuming that role,” they concluded.