The cryptocurrency market has lately been impacted by several factors. Bitcoin (BTC) retreated sharply from its recent highs over the past few weeks and is back on track to surpass the $100,000 mark again.

The Federal Reserve’s decision to halt interest rate cuts, coupled with fears of a global trade war owing to Trump’s proposed tariffs, has been denting investors’ spirits. However, Bitcoin still has immense potential and is on track to attain new highs this year.

Bitcoin-centric stocks like Visa Inc. V, Robinhood Markets, Inc. HOOD and Interactive Brokers Group, Inc. IBKR would thus be lucrative buys. Each of these stocks has strong growth potential for 2025 and has seen positive earnings estimate revision in the last 60 days.

Bitcoin Recovers From Earlier Lows

On Thursday, Bitcoin hovered around $98,300, recovering from its lows last week, when the cryptocurrency declined to $93,000. The volatility in the crypto market comes after a solid 2024 that saw Bitcoin hitting an all-time high of $106,533 on Dec. 22. Bitcoin then hovered in the $102,000-$103,000 range for some time before retreating sharply.

A large number of factors have been making the cryptocurrency volatile over the past few weeks. The recent downturn is driven by concerns over a potential global trade war following Trump’s announcement earlier this week about imposing 25% tariffs on the import of pharmaceuticals, autos and semiconductors.

Last week, Trump announced tariffs on all steel and aluminum exports. Earlier this month, Trump declared a 25% tariff on all imports from Mexico and Canada but later delayed it for a month due to negotiations. However, he has already imposed a 10% tariff on several Chinese imports, with Beijing announcing retaliatory tariffs.

Moreover, a rise in inflation over the past few months has raised concerns of a delay in the next rate cut. The consumer price index (CPI) rose 0.5% sequentially in January from a rise of 0.4% in December. On a year-over-year basis, CPI climbed 3% in January from 2.9% in December.

Bitcoin Still Holds Potential

In January, the Federal Reserve kept interest rates unchanged after implementing three consecutive cuts totaling 100 basis points. The recent surge in inflation has led experts to revise their forecasts regarding rate cuts. Initially, market participants anticipated that the Fed would resume cutting rates in March, but they now expect a more cautious approach, with no cuts likely before the second half of this year.

Higher interest rates can negatively affect cryptocurrencies by reducing investor appetite for riskier assets, raising the opportunity cost of holding non-yielding assets like Bitcoin, and strengthening the U.S. dollar, which often puts pressure on the crypto market. These uncertainties have unsettled the broader market, with cryptocurrencies also experiencing the impact.