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Bitcoin surged (BTC-USD) past $99,300 (£74,786) early on Thursday, edging closer to the $100,000 (£75,313) milestone, amid optimism surrounding US president Donald Trump's anticipated trade deal with the UK.

The largest cryptocurrency by market capitalisation gained over 2.5%, buoyed by expectations of tariff reductions and improving macroeconomic conditions.

Trump is scheduled to announce the framework of the UK trade agreement at a news conference later on Thursday.

In a social media post on Wednesday, US president Donald Trump teased that a trade deal announcement would be coming on Thursday,

He said that the conference concerns a "MAJOR TRADE DEAL WITH REPRESENTATIVES OF A BIG, AND HIGHLY RESPECTED, COUNTRY. THE FIRST OF MANY!!!"

Bloomberg reported that, according to people familiar with the matter, the agreement is expected to be with the UK.

The deal is expected to include tariff reductions on key sectors such as automotive and digital services. This would mark the first significant trade agreement for the administration since the imposition of sweeping tariffs on trade partners last month.

Read more: Crypto live prices

The announcement has positively impacted financial markets as well as the cryptocurrency market. US equity indices posted pre-market gains. Dow futures (YM=F) were up 0.55%, S&P 500 futures (ES=F) up 0.78%, and Nasdaq futures (NQ=F) up 1.09%.

US Federal Reserve Hold Rates Steady

Risk assets are still absorbing the implications of Wednesday's Federal Reserve decision to hold interest rates steady in the range of 4.25% to 4.5%.

However, Nexo analyst Iliya Kalchev told Yahoo Finance UK that the US Federal Reserve’s ongoing commitment to quantitative tightening could limit the longevity of any rally.

"Bond yields, particularly on the long end, may edge higher in response to the sustained runoff, while the US dollar could see modest strengthening as expectations for a dovish pivot fade," Kalchev said.

"Risk assets such as cryptocurrencies and growth stocks may enjoy short-term support, though tighter financial conditions remain a limiting factor over the medium term."

While full details of the potential US-UK trade agreement remain unclear, any rollback of tariffs could provide a boost to risk assets, Kalchev added.

Bitcoin’s rally is unfolding even as the Federal Reserve scrapped earlier plans to ease the pace of its balance sheet runoff. Balance sheet runoff is when the Fed lets some of its bonds expire without replacing them, which slowly pulls money out of the economy to cool things down.

"The Fed abandoned its earlier plans to slow the pace of balance sheet runoff and this means that the current monthly caps on Treasury and mortgage-backed securities redemptions will remain in place, allowing quantitative tightening to continue at its present pace," Kalchev said.

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Quantitative tightening weighs on risk assets because it reduces the amount of money circulating in the financial system. By letting bonds mature without reinvestment — balance sheet runoff — the Federal Reserve is effectively pulling liquidity out of the economy. This makes borrowing more expensive and investing in riskier assets like stocks and cryptocurrencies less attractive.

Kalchev added that Fed chair Jerome Powell struck a measured tone at Wednesday's post-Federal Open Market Committee (FOMC) press conference, noting that while economic growth and labour markets remain robust, policymakers are now more mindful of growing uncertainty.

"Policymakers appear focused on managing both sides of the dual mandate, keeping a close eye on inflation pressures while also being mindful of risks to employment, and markets are likely to interpret the decision as steady but not soft," Kalchev said.