Investing.com-- Bitcoin edged lower on Tuesday, marking its third consecutive day of declines as market participants remained cautious amid uncertainty surrounding U.S. trade tariffs and the Federal Reserve’s interest rate outlook.
The world’s largest cryptocurrency inched 0.8% lower to $95,424.7 by 01:14 ET (5:14 GMT).
Investors are closely monitoring developments in U.S. trade policy, as President Donald Trump’s administration signaled potential new reciprocal tariffs on every country taxing U.S. imports.
The prospect of escalating trade tensions has raised concerns about a slowdown in global economic growth, which could weigh on risk assets like Bitcoin.
Analysts noted that cryptocurrencies, often seen as a barometer for risk appetite, are particularly sensitive to shifts in macroeconomic sentiment.
Adding to the cautious mood, markets are awaiting clarity on the Federal Reserve’s monetary policy trajectory.
The latest U.S. Consumer Price Index (CPI) data, released last week, showed inflation persisting above the Federal Reserve's 2% target, fueling speculation that the central bank may maintain a hawkish stance for longer than anticipated.
Higher interest rates typically reduce the appeal of non-yielding assets like Bitcoin, as investors seek safer returns in traditional markets.
Standard Chartered (OTC: SCBFF ) Bank (Hong Kong) (HK: 2888 ), Animoca Brands, and Hong Kong Telecommunications (HKT) (HK: 6823 ) have announced a joint venture to apply for a license from the Hong Kong Monetary Authority (HKMA) to issue a Hong Kong dollar-backed stablecoin.
This collaboration aims to leverage Animoca Brands' blockchain expertise and HKT's telecommunications services to explore opportunities in the crypto market and enhance both domestic and cross-border payments.
Stablecoins are digital assets designed to maintain a fixed value relative to a government-issued fiat currency or other reference rate. They traditionally serve as a bridge for transactions involving digital assets on blockchains, which cannot directly interact with fiat currencies.
The move comes as Hong Kong policymakers press ahead with initiatives to promote the city as a leading cryptocurrency hub.
In parallel, there is growing enthusiasm around stablecoin adoption and the introduction of cryptocurrency exchange-traded funds (ETFs).
Financial institutions are recognizing the potential of stablecoins and ETFs to provide more secure and accessible investment avenues, thereby attracting a wider range of investors to the cryptocurrency market.
Most altcoins also fell in line with Bitcoin’s movement amid a broader risk-off mood but saw much bigger declines than Bitcoin.
World no.2 crypto Ether ticked down 0.8% to $2,663.8 on Tuesday
World no. 3 crypto XRP dropped 4% to $2.5684.
Solana plunged 9.1% and Polygon fell 5.1%, while Cardano was 3.4% lower.
Among meme tokens, Dogecoin fell 5.3%, while $TRUMP slipped 7.6%.