crypto

President Trump wants to make the US the crypto capital of the world. However, since he took office, crypto and the stock markets are in crisis. Bitcoin is down from its recent 108k ATH by 25%. Its current price is 82k. However, earlier today, it also dipped to 80k. 

So, what is going on? Are we going to see more pain and is a bear market about to start? Or is there light on the horizon? Are the tariff wars taking the wind out of the financial markets? I’m taking a closer look at some aspects of the current crypto market and what they mean.

The Crypto Hype by Trump

Crypto was part of Trump’s presidential campaign. But, keep in mind, that four years ago, he was anti crypto. Did he ever change his mind! Now he wants to make the USA the crypto capital of the world. During a conference at the WEF (World Economic Forum) he announced that “America will be the world capital of crypto”. 

So, after almost two months in office, what did we get?

  • Last week, Trump signed an executive order. This EO established the Strategic Bitcoin Reserve and U.S. Digital Asset Stockpile. For the long term, this is bullish news. However, for the short term, it’s bearish news, since only already confiscated assets are being used. There’s no initial buying of $BTC by the US government.
  • Last week, we also saw the first ever crypto summit by the White House. It sounded great on paper, but in reality, it was like a nothingburger.
  • The SEC got an overhaul, and a more pro crypto stance is in the making.
  • David Sacks became the crypto czar in Trump’s government. He is very pro crypto.
  • We also saw massive news with the Comptroller letter. This allows US banks to be validators on public networks, custody crypto for customers, and hold stablecoins. This is massive news.

Trump’s Crypto Actions

So, there are definitely positive developments. But we also shouldn’t forget other aspects of Trump’s crypto influence. For example,

  • He launched the $TRUMP memecoin days before his inauguration. Thus, avoiding any potential conflict of interest. Many call this a rug.

  • We also saw his announcement of a Strategic Crypto Reserve on a Sunday, which included $XRP, $SOL, and $ADA. Later he added $BTC and $ETH as well. This caused the market to spike, only to crash even harder the next day.

So, the markets didn’t stop there. Trump is getting more and more criticism over his crypto policies. On paper, it all looks good. However, the reality is that our portfolios are back to bear market levels. 

Why Is the Market Reacting This Way?

The tariff war is something that worries many people. Trump managed to get under the skin of Canada and Mexico. These are US-friendly countries. They had long-standing friendly relationships with the US. China is also part of the tariff war. However, the relationship between China and the US was always a more tense one. 

But what are the tariff wars exactly? Here’s a good 2-minute description. 

So, tariffs see hardships in the short term but are likely to benefit the US in the long term.  For decades. The US has had a kind of free trade border with Canada and Mexico. That’s about to change and can cause a shock to the economy. So, we may see a few months of negative to no growth. This can cause quantitative easing. That’s when the money printer goes brrr. 

The March inflation data is not looking good. However, this could be positive news for crypto and other financial markets. So, is Trump looking for a recession? There’s $9.2 trillion of US debt on the table. When the US has to refinance this, a recession would almost guarantee rate cuts. 

Every US recession dating back to the 1980s followed a peak in the Fed Funds Rate. When such economic growth stalls, the Fed “stimulates” the economy. In other words, lower the interest rates to lower the cost of capital and promote spending. 

Trump wants to lower the rates and is willing to go all the way. This includes a recession, since this may be the only solution to lower rates. And this brings us back to the money printer going brrr. This would bring new money to the market and could be positive for the financial markets.

Brian Armstrong, What Is Next?

So, back to crypto and the crypto summit in the White House. Besides President Trump and Sacks, we also saw plenty of well-known crypto names attending. Michael Saylor, the Winklevoss twins, and Brian Armstrong, the Coinbase CEO.

He mentioned that Trump breathed life back into the crypto industry. This leads Coinbase to create around 1000 jobs in the US. More positive crypto legislation should be on the way. The US government is now officially looking into a Strategic Bitcoin Reserve. This could lead other countries into doing the same. So, long term, this is bullish.

Armstrong credited the 1000 jobs to Trump’s proactive crypto stance. However, if we look at Elon Musk and DOGE’s strategy, 1000 jobs is merely a drop on a hot plate. According to the Challenger report, DOGE already led to 62,242 job cuts in February. A federal judge prevented more employees from being laid off. 

It looks like for the rest of the year, DOGE plans plenty of more job cuts. This could be a hard story to sell, even to Trump voters who are getting sacked. As a result, protests against Musk and DOGE are starting to flare up around the US.

So, in the short term, we can see more pain. Maybe $BTC going down as far as 70k. However, this would still be a lower high on the chart. So, there’s still potential for positive news.

What do you think of Trump’s current course of action? Let me know in the comments and join our discussions on Discord and X.

Disclaimer

The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment and informational purposes only. Any information or strategies are thoughts and opinions relevant to accepted levels of risk tolerance of the writer/reviewers, and their risk tolerance may be different from yours.

We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence.

Copyright Altcoin Buzz Pte Ltd.

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