During the first three months of his presidency, Donald Trump sparked trade tensions by announcing prices on Canada, Mexico and China and the result was unexpected to American and global markets.
The fees of the prices have been relatively rapid, and the impact was felt on the cryptography market. As of March 8, the American president moved away from certain plans to impose prices on certain Mexican and Canadian products – another touch in the roller coaster of American trade policy which continues to shake up the markets.
The Singapore Crypto QCP Capital trading company said in a note. “This week’s cryptographic markets are nothing less than roller coaster. With the macro-conditions in flow, the crypto remains closely linked to actions, the action of prices reflecting wider economic changes. »»
Wild swings highlight volatility in advance for cryptocurrencies – often considered as high -risk assets – because the Trump administration is testing the limits of economic and foreign policy and serves as a story of precursation while uncertainty permeates the markets.
In an article on X, the former American secretary of the Treasury Lawrence Summers said that […] The pricing policy has already removed $ 2 billions of US stock market value “and Summers suggested that these measures were” poorly designed “and that they would undermine the competitiveness of the United States.
“No wonder the Wall Street’s fear gauge is up by a third party.”
Volatility index (VIX) Price action. Source: Yahoo! Finance.
While prices and announcements of Trump market travel policy can create a feeling of imminent misfortune, their impact on the future of the cryptography sector remains in question. If a trade war weakens the US dollar by inflation, Bitcoin could really benefit, explains Eugene Epstein, responsible for commercial and structured products at MoneyCorp. Investors fleeing fiduciary currencies in depreciation can turn to crypto, and if the nations with a price move down their currencies in response, Bitcoin could serve as a vehicle for capital flight.
Unlike traditional markets, Bitcoin is negotiated 24/7 and instantly reacts to macroeconomic changes, which makes it very vulnerable to the feeling of risk. “Regarding the feeling, the main engines of the crypto will continue to be the status of a federal cryptography reserve as well as the global feeling of risks. If American actions continue to fall, it is difficult to imagine a strong cryptography market, at least in the short term, “said Epstein.
Much in the crypto community expected Trump to the White House sending an evolution of Bitcoin, and initially, it did – from $ 69,374 on the day of the ballot to a record of $ 108,786 per day of inauguration. But since then, BTC has dropped, falling below $ 80,000 at the end of February and again in March. Prices weakness occurs despite the pro-Crypto position of the administration, including the plans of a strategic cryptography reserve and structural reforms on the market.
The cumulative flows in the FNB Bitcoin Spot reached record heights after Trump’s victory, investors paying more than $ 10 billion in these instruments in the aftermath of the election, according to the data from distant investors. However, growing concerns concerning a potential tariff war seem to have wreaked havoc on the feeling of the market and, by extension, on cryptocurrencies.
Since the beginning of February, the Bitcoin ETF have experienced significant outings while uncertainty has been looming with the broader economic landscape. At the same time, Safe Haven assets and gold, in fact responded positively in the midst of the tariff war.
Bitcoin and Flows spot. Source: eccentric investors.
This is not the first time that President Trump has been working threats as a currency and some traders think that the market will adapt to focus on the fundamental principles of the frank use of prices as a means of forcing changes in policy between American allies.
This is why some industry traders choose not to base their strategies only on prices. For Bob Walden, responsible for exchanges in Abra, the prices are “only a title” which influences the feeling of short -term investors but does not change the fundamental conditions of the market.
“For me, prices are a red herring. This is something that Trump uses as a negotiation chip, and I don’t think they mean anything for crypto. They first provoked a lowering – Tariffs caught a market that was long at the top and over -evacuated in search of an exciting movement – but it was a correlation, not causality. »»
Related: 3 reasons why Bitcoin sells for Trump Tariff News
Walden highlights Trump’s budgetary austerity program as a true engine of cryptographic markets.
“This is what everyone is looking in the Tradfi space. The prices are only another piece of the budgetary austerity trade which occurs in the global markets – this is in fact what influences much more crypto, because budgetary austerity means less money to deploy. »»
This article is for general information purposes and is not intended to be and must not be considered as legal or investment advice. The points of view, the thoughts and opinions expressed here are the only of the author and do not reflect or do not necessarily represent the opinions and opinions of Cointellegraph.
