- Bitcoin surged after the US-UK trade deal and BoE rate cut boosted market sentiment.
- Trump’s UK deal reduces tariffs and is expected to generate $6B in external US revenue.
- The BoE’s rate cut to 4.25% prompted investors to shift focus toward cryptocurrencies.
Bitcoin reached $101,784 on May 8, a new high in over two months. The increase is speculated to have been raised following two prominent events, such as the US-UK deal and the Bank of England’s (BoE) rate cut. Notably, the United States and the United Kingdom reached a new trade agreement that focused on tariff reduction, boosting economic cooperation. On the other hand, the Bank of England participated in a 25 basis point rate cut.
During a press conference in the Oval Office, President Donald Trump announced the trade agreement and confirmed that non-tariff barriers will be reduced by the United Kingdom. In exchange, the United States will have to lower tariffs on UK-made cars to 10%. Tariffs on beef will also be reduced almost to zero. Trump declared the agreement historic and stated that negotiations had been going on for a couple of years.
UK Prime Minister Keir Starmer commended the deal, stating that it was a long-overdue accomplishment for both countries. President Trump added that the agreement was expected to produce external receipts worth six billion dollars. Commerce Secretary Howard Lutnick said that the UK will facilitate access to US exports, and that the country intends to acquire $10 billion worth of Boeing aircraft.’
Related: Fed Holds Interest Rates Steady Amid Inflation and Job Stability
Meanwhile, the BoK reduced its benchmark interest rate from 4.50% to 4.25 %. The move was widely expected and reflects the central bank’s effort to support economic growth while managing ongoing inflation concerns. The split of votes was 5-2-2, indicating differences of opinion among the policymakers. However, the direction of the result still indicated a loosening approach to monetary policy. Investors tend to look for other assets, including Bitcoin, when the interest rates are low.
Impact of Global Events on Bitcoin
Bitcoin reacted swiftly to the combined effect of the Trump-UK trade deal and the Bank of England’s interest rate cut, with the impact becoming evident shortly after both announcements. Investors took the news as an indication of increasing global stability, garnering investor interest in cryptocurrencies.
As of press time, BTC is trading at $102,844, up by 5.92% from the previous day. The value of Bitcoin has since recovered over 28% from the previous low of $74,000 in the first quarter. Considering the surge, market observers pointed out the reason as investor confidence and institutional interest, while keenly monitoring for other global developments.
Source: TradingView
Overall, the integration of aggressive trade diplomacy and relaxed monetary policy has tipped the balance in favor of Bitcoin. Market sentiment continues to be bullish as the global economic alignments improve, encouraging more institutional interest and retail confidence. Further, analysts remain optimistic that Bitcoin will continue its upward trajectory, provided current macroeconomic conditions persist.
