Bitcoin Price, XRP Soar. Here's the Risk to the Crypto Rally. — Barrons.com

By Elsa OhlenBitcoin price rallied after a week that reignited investors' risk appetite, particularly for digital assets.Bitcoin was up 4.5% to $103,737 over the last 24 hours, according to CoinDesk data. The world's largest cryptocurrency crossed $100,000 for the first time since early February on Thursday afternoon.Altcoin Ether led the gains among the big cryptos, soaring 24% to $2,381. XRP and Solana rose 7.3% and 9.4%, respectively.Trade developments between the Trump administration and trading partners played a big role in crypto's recent surge. On Thursday, the U.S. and the U.K. announced a trade agreement — the first since Trump declared sweeping global tariffs on April 2, or "Liberation Day."U.S. officials are also set to meet their Chinese counterparts over the weekend for talks, which may lead to a de-escalation of the trade war between the world's two biggest economies.While Bitcoin and other cryptos have seen impressive gains this week — the former is up roughly 10% since early Monday — there are risks to the rally.If more significant trade agreements don't materialize before the 90-day pause on the bulk of Trump's "reciprocal" tariffs expire in July, most economists agree that will push inflation higher. That would prompt the Federal Reserve to keep interest rates higher for longer, with higher borrowing costs hampering investors' appetite for riskier assets like cryptocurrencies.In the central bank's latest decision to keep interest rates steady at 4.25%-4.5%, Fed chair Jerome Powell said tariffs contribute to elevated uncertainty around inflation.Write to Elsa Ohlen at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.