In the Spotlight
Cryptocurrency Bitcoin Surges Due to Enhanced Risk-Taking Prompted by Impressive Earnings Reports of Top 7 Companies
Bitcoin galloped towards $97,000 yesterday, as stocks soared following impressive earnings from Microsoft and Meta, while the U.S. Chamber of Commerce sounded the alarm about the severe damage tariffs could inflict on small businesses.
The digital currency was trading around $96,600, a 2.7% climb over the previous 24 hours, according to the crypto data provider, CoinGecko. Nevertheless, altcoins demonstrated greater gains, with Ethereum and Dogecoin surging 3.5% to $1,850 and 5% to $0.18 respectively.
These tech giants' Q1 profits surpassed analyst predictions, indicating that President Trump's trade war hasn't hindered the "Magnificent Seven" stocks nor the AI trade that momentarily transformed chipmaker Nvidia into the world's richest firm last year. Nvidia's stock price jumped 2.6% to $112, per Yahoo Finance.
There's a possibility of a bilateral chip deal between the U.S. and U.A.E., easing Nvidia's sales restrictions to the region, according to Bloomberg. The U.S. visit to the U.A.E. is planned for later this month.
Steven Lubka, head of private clients at Swan Bitcoin, believes Bitcoin thrives on investors' risk-on sentiments. The cryptocurrency has been on a rally even amid tariff-induced turbulence and gold price fluctuations.
"The financial terrain is, 'heads we win, tails we win,'" Lubka said. "Either the economic situation worsens, igniting Bitcoin's rally with gold [...], or we clear this tariff chaos, and Bitcoin still wins."
The economy contracted at a 0.3% annualized rate during Q1 as per the U.S. Bureau of Economic Analysis, stirring recession concerns. Some analysts believe that Bitcoin could benefit if a slowdown prompts the Federal Reserve to decrease interest rates.
Small businesses in the U.S. face an alarming future due to tariffs, according to the U.S. Chamber of Commerce, who sent a stern warning in a letter. "Small businesses are on a precipice, threatened by the escalating costs brought by tariffs and disrupted supply chains," wrote Chamber President and CEO, Suzanne P. Clar.
Lubka insists that investors have begun seeing through tariffs' complexities, with the market increasingly convinced that these policies are not long-term.
"The market is starting to sniff out the fallacy in tariffs," Lubka said. "They think these policies aren't going to stick."
Edited by James Rubin
Scene Unveiled
Times are tough for small businesses, with the payment of higher costs for imported goods and raw materials due to tariffs proving challenging. These businesses typically have slim profit margins, which makes absorbing these increased costs difficult. Furthermore, small businesses are more susceptible to supply chain disruptions, with limited capacity to switch suppliers or negotiate better deals. This leads to rising operational expenses. Lastly, as tariffs push up product prices, consumers are likely to curtail spending, favoring cheaper retail options – a disadvantage for small firms.
The U.S. Chamber of Commerce published a warning, emphasizing that tariffs could spell doom for numerous small businesses. The organization notes that the rising costs associated with tariffs put small enterprises under immense financial strain. The White House seemed to acknowledge these concerns, proposing a 90-day halt on reciprocal tariffs with exceptions for China. However, specifics about how these policies would assist small businesses remain unclear. The complicated approach to managing tariffs that balances economic strategy with international relations contributes to the ambiguity.
- Despite the tariffs' impact on small businesses, Bitcoin witnessed a surge, trading around $96,600, according to CoinGecko.
- The digital currency Ethereum also saw gains, trading at $1,850, with a 3.5% climb over the previous 24 hours.
- Investor Steven Lubka opines that Bitcoin thrives on investors' risk-on sentiments, and it has been on a rally, even amid tariff-induced turbulence and gold price fluctuations.
- Despite the uncertainties generated by tariffs, Lubka argues that the market is starting to see through their complexities and is growing increasingly convinced that these policies are not long-term.
- Crypto enthusiasts might view Bitcoin as an attractive investment option if a slowdown prompts the Federal Reserve to decrease interest rates.
- As the U.S. Chamber of Commerce warns of the potential damage tariffs could inflict on small businesses, the technology sector, particularly cryptocurrencies like Bitcoin and Ethereum, remains in the general-news spotlight.
