Bitcoin climbs 8% weekly to $59,200 amid US-China tariff negotiation progress and shifting Fed rate expectations, while institutional ETF inflows hit $1.2B.
The cryptocurrency surged to $59,200 on July 12 – its strongest level since May’s market turmoil – as traders priced in dual catalysts from geopolitics and monetary policy shifts.
Geopolitical Winds Fuel Crypto Rally
Bitcoin’s 8% weekly gain coincided with concrete progress in US-China trade negotiations, as Bloomberg reported on July 10 that Washington proposed cutting semiconductor tariffs by 50%. This follows China’s July 9 announcement allowing Hong Kong-based crypto firms to facilitate cross-border settlements, effectively creating new liquidity channels.
Fed Policy Remains Key Driver
Despite Chair Powell’s cautious July 11 testimony, markets now price 74% odds of September rate cuts according to CME FedWatch. BlackRock’s IBIT ETF recorded $1.2B inflows this week – the largest since April – suggesting institutions view BTC as both inflation hedge and growth proxy.
Technical Breakout Confirmed
The rally pushed Bitcoin above its 200-day moving average at $57,400, with derivatives data from CoinGlass showing open interest up 22% week-over-week. ‘This isn’t just speculative fever,’ Matrixport analyst Markus Thielen noted. ‘We’re seeing real capital rotation from traditional safe havens.’
Historical Precedents Suggest Caution
Bitcoin’s current surge echoes patterns from 2021 when institutional adoption propelled prices to $69,000, only to crash 55% within months. Similarly, the 2017 rally saw 80% corrections after retail investor mania peaked. However, today’s market structure differs fundamentally through ETF participation now comprising 28% of total liquidity (Glassnode).
Broader Implications for Digital Assets
The simultaneous easing of China’s capital controls and Fed dovishness recalls 2016’s ‘Shanghai Accord’ when coordinated policy shifts stabilized markets. Crypto now appears increasingly correlated with traditional macro drivers – a 2024 BIS study shows BTC’s sensitivity to Fed decisions has tripled since 2020.
