The spring atmosphere in the global economy has benefited crypto.

A white page has been opened in the customs tax tension that U.S. President Donald Trump has indicated as a way to close the trade deficit and erase the $35 trillion debt. As is well known from Trump's first term, he often used customs taxes as a political bargaining chip. However, this fact could not prevent the U.S. stock markets from stalling last month. The signals of easing given in the increasing tension caused by trade wars have cleared away the dark clouds hovering over the markets.

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

QCB Capital analysts referred to Trump's frequent statements along the lines of "I understand negotiations the best, I make the best deals," stating that "the art of the deal era looks alive and well."

S&P 500 recovered its losses

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

QCB Capital, stating that inflation 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 is expecting interest rates to remain unchanged at the June meeting, with 91% expecting this. Meanwhile, only 8% anticipate a 25 basis point cut.

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

Emphasis on ETH

QCB Capital analysts, who also mentioned the overall outlook of the crypto market, stated, "Crypto has outpaced stocks in the recovery process and BTC is approaching all-time highs. Meanwhile, ETH is trying to catch up with the ETHBTC trading pair currently at the 0.025 level."

QCB Capital, which opens a separate bracket for the cryptocurrency of the Ethereum blockchain, Ether, argued that "Funding continues to remain neutral and options are shifting towards puts instead of calls, which shows that the breakout is not driven by speculative excess."

"There is a shift from US dollars to gold and crypto"

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

Four weeks of consecutive 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. Since the beginning of the year, inflows have reached 6.7 billion USD, 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 the combination of factors such as the global increase in M2 money supply, stagflation risks in the US, and several US states approving Bitcoin as a strategic reserve asset."

There has been a significant increase in the total value of the crypto market. While the market value was $2.9 trillion on May 6, this amount has risen to $3.33 trillion in the past eight days.

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