The spring atmosphere in the global economy has benefited crypto.

A new chapter has opened in the customs tariff tension that U.S. President Donald Trump has pointed out as a way to close the foreign trade deficit and wipe out the $35 trillion debt. As known from Trump's first term, he often used tariffs as a political tool, which is well known to everyone. However, this fact did not prevent the U.S. stock markets from stalling last month. The signals of easing amid the increasing tension from trade wars have cleared the dark clouds hovering over the markets.

After announcing that they are close to signing bilateral trade agreements with England and then China, the markets, which relaxed, turned their direction upwards in the second week of May. In a market note shared on the subject, Singapore-based digital asset investment firm QCB Capital stated, "The markets showed a sharp recovery as U.S. trade diplomacy unexpectedly gained momentum. Washington secured the withdrawal of tariffs by signing a significant $600 billion trade agreement with Saudi Arabia."

QCB Capital analysts, referring to Trump's frequent statements such as "I understand negotiations the best, I make the best deals," stated that "the era of the art of deal-making looks alive and well."

S&P 500 regained its losses

Analysts highlighting that stocks have risen another notch stated, "The S&P 500 erased last month's 17% decline and is currently trading sideways on an annual basis, defying expectations of a downturn and indicating the market's renewed appetite for risk."

QCB Capital, stating that inflationary concerns have eased with the U.S. consumer inflation index data coming in below expectations, nevertheless indicated that it expects the cautious stance in the monetary policy monitored by the U.S. Federal Reserve to continue. "Officials reiterated their data-dependent stance in the last meeting, highlighting the uncertain downward effects of tariffs on unemployment and inflation."

"September is more realistic for interest rate cuts"

According to CME FedWatch, which makes predictions about the Fed's upcoming interest rate decisions, an overwhelming majority of the Federal Open Market Committee expects to keep rates unchanged at the June meeting, with (91%) expecting no change. Meanwhile, the proportion of those expecting a 25 basis point cut is only 8%.

Indeed, QCB Capital also pointed to a similar scenario: "The first discount is currently being priced for July, but in our view, given the Fed's desire for more clarity, September is more realistic. The market pricing has also adjusted accordingly, and the number of interest rate cuts that was four a month ago is now expected to be two for 2025."

ETH emphasis

QCB Capital analysts, who also touched on the general outlook of the crypto market, stated, "Crypto has outperformed stocks in the recovery process, and BTC is approaching all-time highs. Meanwhile, ETH is trying to close the gap as the ETHBTC trading pair is currently at the 0.025 level."

QCB Capital, which opens a separate parenthesis for Ether, the cryptocurrency of the Ethereum blockchain, argued that "Funding continues to remain neutral and options are shifting towards selling instead of buying, which shows that the break is not due to speculative excess."

"There is a shift from the US dollar to gold and crypto"

On the other hand, a senior executive at the Switzerland-based bank UBS Group stated that its clients are increasingly moving away from US dollar assets and instead turning to gold, crypto, and China. Speaking at a Bloomberg event on Tuesday, Amy Lo, co-head of wealth management for the Asia-Pacific region at UBS Group, said that the trade tensions between the US and China have prompted investors to diversify their assets that are "too US-centric." Lo mentioned that clients are not only exploring other currencies but are also investing more in crypto, commodities, and alternative assets.

Four weeks of inflows into crypto funds

It is possible to see the increase in capital entering the crypto market from the data published by the digital asset company Coinshares. According to Coinshares data, digital asset investment products recorded inflows of a total of 882 million dollars globally for the fourth consecutive week. Year-to-date inflows have reached 6.7 billion US dollars, approaching the peak of 7.3 billion dollars reached in early February of this year. The Coinshares report included the following statements: "We believe that the sharp increase in both prices and inflows is due to a combination of factors including the global increase in M2 money supply, stagflation risks in the US, and several US states approving Bitcoin as a strategic reserve asset."

There is a significant increase in the total value of the cryptocurrency market. While the market's value was 2.9 trillion dollars on May 6, this amount has risen to 3.33 trillion dollars in the eight days that followed.

This article does not contain investment advice or recommendations. Every investment and trading action carries risk, and readers should conduct their own research when making decisions.