TrumpTrade War Triggers Rate Cut Bets as Crypto and Stocks Slide — Will Bitcoin XRP and ADA Rebound
The odds of an emergency interest rate cut by the Federal Reserve have surged this week as former President Donald Trump’s aggressive trade war stance sends shockwaves through global markets—and the crypto sector is already feeling the heat.
On Polymarket, a leading crypto-based prediction platform with over $360,000 in wagers, the probability of a surprise Fed rate cut has more than doubled, jumping to 31% from just 15% at the start of April. Kalshi, another regulated prediction exchange, places the odds even higher at 41%—the most elevated level seen since late 2023.
Trade Tensions Escalate: 104% Tariffs on China
Market sentiment flipped after Trump confirmed the imposition of a sweeping 104% tariff on all Chinese goods, part of an aggressive strategy to reshape U.S. trade balances. The tariff applies to China’s $432 billion in annual exports to the U.S., disrupting a trade relationship that totals $582 billion in volume.
Tariffs have also been slapped on other major economies, including the EU, Japan, South Korea, and Vietnam, signaling a dramatic return to protectionist policies that could trigger a global slowdown.
Top Wall Street analysts at JPMorgan, BlackRock, and Goldman Sachs have all raised their recession risk forecasts for the U.S., citing tightening credit conditions and falling consumer sentiment.
Crypto Markets React: Bitcoin, Cardano, XRP Enter Bear Territory
The crypto market didn’t wait long to react. As macro uncertainty surged, Bitcoin (BTC) dropped 3.06%, while Cardano (ADA) plunged 7.04% and Ripple’s XRP fell 6.4%, dragging the entire altcoin sector into bearish territory.
These losses mirror sharp declines in the equity markets, with the Dow Jones, S&P 500, and Nasdaq 100 all down over 20% from their 2024 highs—officially entering a bear market.
Snapshot of Current Crypto Performance:
- Bitcoin (BTC): $77,016 ▼ -3.06%
- Cardano (ADA): $0.41 ▼ -7.04%
- XRP: $0.48 ▼ -6.4%
Could a Fed Rate Cut Spark the Next Crypto Boom?
While current price action looks grim, history suggests a Fed rate cut could ignite a major turnaround.
In March 2020, the Fed slashed rates to zero and launched a massive stimulus program as the COVID-19 crisis unfolded. The result? Bitcoin surged from $3,800 to $69,000 in just 18 months. XRP rallied from $0.12 to nearly $2, and Cardano skyrocketed to $3, peaking with a $91 billion market cap.
If emergency rate cuts and new fiscal stimulus materialize—as Trump has hinted with talk of farm bailouts and exporter tax credits—crypto markets could see similar upside potential.
Eyes on the Fed and Trump’s Next Move
As investors brace for another volatile week, all eyes are on the Federal Reserve’s next decision and further developments from the Trump camp. Will policy makers intervene with liquidity measures—or will this trade war escalate into a full-blown global downturn?
In the meantime, risk assets like Bitcoin, Cardano, and XRP may remain under pressure, but traders are watching closely for signals of policy pivot, which could set the stage for a historic rebound.
