Markets React to Inflation, Trade Woes and Debt Auctions
U.S. Economy and Crypto Performance
Bitcoin reached an intraday high of $108,470 (up 1.7%) on Monday according to CoinGecko, while Solana climbed 2.9% to $156 and altcoin Hyperliquid saw a 7% increase to approximately $38.
Separately, the U.S. heralded inflation figures that exceeded expectations.
US-China Trade Talks Loom as Deficit Concerns Mount
On Monday, Vice Premier He Lifeng was in London for the “first meeting of the Sino-U.S. economic and trade consultation mechanism,” amidst escalating trade friction.
U.S. President Donald Trump, following a May call with Chinese President Xi Jinping that he described positively, had announced a 90-day pause on U.S. “reciprocal” tariffs, set to expire in July. Subsequent accusations against China violating this pause have heightened tensions.
Relatedly, the deeply unpopular One, Big Beautiful Bill (OBB) fiscal proposal, estimated by the Congressional Budget Office to add $2.4 trillion to the deficit over a decade, overshadowed trade developments, contributing to administrative friction with figures like Elon Musk.
Fears of Bond Market Volatility Prompt Crypto Analysts’ Comments
An analyst anticipates potential market shifts following Thursday’s U.S. debt auction, amid concerns over broadening budget deficits.
Crypto analysts are monitoring U.S. debt auctions closely, linking them to potential solace for Bitcoin over traditional risk assets like stocks and Treasury bonds. Bitunix analysts highlight the erosion of confidence in the dollar and U.S. debt sustainability.
CoinShares Research Head James Butterfill suggests that under duress, Bitcoin traditionally outperforms equities and Treasuries.
In mid-May, a poorly received 20-year Treasury auction coincided with Moody’s U.S. debt downgrade, causing a noticeable Bitcoin price drop and broader market sell-off shortly after.
