Donald Trump has returned to the White House for a second term, and he has already made a mark on the markets. Within hours, Bitcoin (BTC) reached a new all-time high of $109,000, while global stock markets are hesitant in their rises. 🌍
However, not everything is optimistic. Trump has promised a “golden age” for the U.S. economy, but his early measures and statements have generated both excitement and uncertainty, affecting stock markets, cryptocurrencies, and commodities such as oil and gold.
In this article, we explore how Trump’s second term might impact the price of Bitcoin and cryptocurrencies, what institutional investors think, and what signals we should watch for in the coming months.
Trump’s Pro-Bitcoin Promises: Reality or Speculation?
It is well known that Trump is pro-market, but moreover, we know he is pro-crypto. During the four years that Donald Trump was out of the presidency, occupied by former president Biden, he launched several NFTs and even a couple of memecoins just days before his new presidential term.
But that’s not all. During his campaign, Trump positioned himself as a defender of economic growth driven by cryptocurrencies. Some of his most notable promises include:
- Strategic Bitcoin reserves: Trump suggested that the United States should lead the crypto market by accumulating Bitcoin as a strategic asset. This move would position the country as a leader in institutional adoption, though it remains a proposal without concrete actions.
- Reducing regulatory barriers: Trump promised to eliminate regulations that limit the growth of crypto and blockchain projects, promoting the U.S. as a hub for technological innovation.
- Incentives for Bitcoin mining: One of the most prominent promises was to reactivate crypto mining in U.S. territory, supporting the transition to renewable energy to counter environmental criticisms.
However, his inaugural speech did not include specific mentions of Bitcoin, cryptocurrencies, or blockchain technology. This raises the question of whether these promises will be a priority or if they were simply campaign tactics to garner support from the crypto community.
Although several experts have called for calm, as for them, President Trump’s priority would not be cryptocurrencies, but internal issues such as migration and public spending, rather than cryptocurrency topics.
In the short term, investors should stay alert to economic and regulatory policy announcements that could directly impact the crypto market and global economies. Previous experience shows that Trump’s decisions can generate volatility spikes, both positive and negative, in this highly speculative market.
Thus, having an ally to buy, sell, and exchange crypto instantly like Bitnovo could be quite useful in this climate of uncertainty, which seems to be perennial for all of us.
Bitcoin and the Stock Market: An Increasingly Strong Connection
Another important point to mention and always highlight is the growing correlation between fluctuations in the U.S. stock market (and even global markets) and risk assets, especially the price of the world’s leading cryptocurrency, Bitcoin (BTC).
Under Trump’s leadership, optimism for pro-market policies could translate into a significant boost for both. Financial markets tend to respond positively to leaders who support deregulation and tax reductions, factors that also influence the adoption of risk assets like Bitcoin.
However, another group of investors raises the alert that potential positive impacts on U.S. commodity markets could lead to a “flight-to-safety” from institutional investors, abandoning risk assets like BTC to seek refuge in “safe” financial assets like U.S. Treasury bonds.
Europe: Stock Markets on Alert Due to Trump’s Policies
In Europe, reactions to the new administration have been mixed. The threat of new tariffs and the focus on fossil fuels are generating uncertainty in key sectors:
- Equities: The German DAX index struggles to stay near 21,000 points, while the pan-European Stoxx 600 struggles to hold at 525 points.
- Renewables and Automotive: Renewable energy companies like Vestas and Orsted have suffered significant drops, with divestments reflecting the impact of Trump’s new push for fossil fuels. Meanwhile, car manufacturers like Volkswagen and Stellantis are threatened by the possibility of import tariffs.
- Banking sector: Uncertainty is palpable. While some European banks like Avanza Bank are up by as much as 10%, others, like Raiffeisen Bank, have suffered declines of up to 5% due to geopolitical sanctions.
The Rest of the World: Asia-Pacific and America React
In Asia, stock markets have shown modest gains, supported by Trump’s promises of a “golden age” for the U.S. economy.
- Asian Markets: Hong Kong’s Hang Seng index rose by 0.8%, while Japan’s Nikkei 225 closed with a 0.3% increase. Australia and South Korea also recorded small gains, although doubts persist about the long-term effects of Trump’s protectionist policies.
- America and Trade Tensions: The threat of new tariffs on Mexico and Canada has raised concerns in markets across the region. Trump has suggested tariffs of up to 25% as a measure to “protect” the U.S. economy, which could negatively impact trade flows and foreign direct investment.
These policies generate a mix of optimism and caution in global investors, who are waiting for clear signals before making significant moves.
What to Expect from Bitcoin’s Price with Trump in the White House?
Although knowing Bitcoin’s future behavior has been impossible for anyone, Bitcoin has proven to be highly sensitive to the macroeconomic environment. In this case, its all-time high of $109,000 came in an environment of optimism regarding Trump’s pro-market policies and growing institutional adoption.
However, several factors need to be considered:
- Short-term volatility: After reaching a record, Bitcoin has slightly retreated to $102,000, reflecting profit-taking in the market and a possible increase in uncertainty.
- Commodities as Indicators: The drop in Brent oil below $80 and the retreat of gold to less than $2,750 highlight uncertainty in the markets, which could indirectly affect Bitcoin as a safe-haven asset.
- Monetary Policy: If Trump’s policies increase inflation, the Federal Reserve could raise interest rates, which historically has negatively impacted risk assets, including Bitcoin.
Although predictions vary, many analysts believe that if pro-crypto policies materialize, Bitcoin could reach $150,000 in the coming months. However, this trend will depend on factors such as institutional adoption and geopolitical stability.
Advice for Crypto Investors in This New Scenario
To navigate this dynamic environment, investors should adopt prudent and well-informed strategies:
- Watch the macroeconomic landscape: Trump’s decisions on trade, regulation, and monetary policy will have a direct impact on Bitcoin and other crypto assets.
- Take advantage of corrections: If prices drop, attractive opportunities may arise to top up your portfolio.
- Stay informed: Market volatility demands staying updated and acting quickly in response to significant changes.
Always maintain a long-term perspective and adjust your strategy to market conditions to make the most of this new political and economic cycle.
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