Why Is Crypto Rising? 4 Key Drivers Behind the Market Rally

Crypto markets surged on Thursday, riding a wave of renewed investor confidence and a series of macroeconomic and political developments that fueled risk-on sentiment. Within just a few hours, sentiment flipped from deep caution to growing optimism—sending Bitcoin above $81,000, with Solana, Hedera, Flare, and Bittensor among the day’s top-performing altcoins.

There are four key catalysts behind this latest rally, each contributing to the broader shift in market dynamics and helping inject fresh energy into the crypto space:

1. Trump’s Tariff Pause Calms Recession Fears

Perhaps the most immediate driver came from Washington: former President Donald Trump’s decision to temporarily suspend “reciprocal” tariffs on more than 70 countries. The move eased widespread concerns that the U.S. economy could slip into a recession, particularly given America’s dependence on global imports.

Markets responded swiftly. Equities ripped higher, with the Dow Jones and Nasdaq posting gains of nearly 3,000 and 1,900 points respectively. Though Trump later doubled tariffs on Chinese goods to 125%, the initial reprieve created enough breathing room for risk assets—including crypto—to climb.

This cooling of geopolitical tension, even if momentary, helped reduce investor hedging behavior, drawing capital back into volatile assets like cryptocurrencies.

2. Inflation Eases, Paving Way for Fed Rate Cuts

A sharp drop in U.S. inflation gave crypto markets even more fuel. The Consumer Price Index (CPI) data for March came in cooler than expected: headline inflation fell to 2.4% from 2.8% in February, while core inflation dropped to 2.8%—marking the first sub-3% print in years.

These numbers revived hopes for interest rate cuts, potentially as early as the next Federal Reserve meetings. Crypto tends to perform well in lower interest rate environments, as cheaper borrowing costs push investors to seek returns in higher-risk, higher-reward markets.

With consumer confidence also declining and economic growth slowing, the odds of aggressive monetary easing have increased—making digital assets like Bitcoin, Ethereum, and altcoins more attractive.

3. Trump’s “Big, Beautiful Bill” Stokes Fiscal Optimism

Adding to the bullish macro backdrop, Trump hinted that his signature tax reform—nicknamed the “Big, Beautiful Bill”—was gaining traction in the Senate. The plan would slash individual and corporate taxes, eliminate levies on tips and overtime, and inject an estimated $4.5 trillion in tax relief over a decade.

While controversial in scope, the fiscal optimism it generated was unmistakable. Traders speculated that increased disposable income and liquidity could flow, at least partially, into alternative investments like crypto. It’s a familiar narrative: money saved on taxes often finds its way into higher-yield opportunities.

4. Pro-Crypto Shift at the SEC Spurs Regulatory Optimism

Rounding out the catalysts was a major change in regulatory leadership. The U.S. Senate voted to confirm Paul Atkins as the new chair of the Securities and Exchange Commission, replacing Gary Gensler—whose tenure was marked by aggressive legal battles with key players in crypto.

Atkins is widely regarded as more crypto-friendly, and the market took the appointment as a sign of regulatory thaw. Notably, lawsuits against companies like Ripple Labs, Coinbase, and Uniswap have already been dropped, sending a clear message that the SEC’s tone is shifting under the new leadership.

The confirmation bolstered hopes for clearer, less combative crypto regulations going forward, helping reduce legal overhangs that have weighed on both investor sentiment and project development.

Together, these developments formed the perfect cocktail for a crypto bounce: macroeconomic relief, political momentum, potential fiscal stimulus, and a friendlier regulatory regime. With volatility back and volume rising, the market now looks ahead to whether these gains have legs—or whether this is just another brief moment of euphoria in crypto’s ongoing macro dance.