Trump’s economic strategy is shifting narratives: from promises of economic growth to the philosophy of "No Pain, No Gain." Tariffs, trade wars, and the Fed’s tight monetary policy are fueling market volatility—directly impacting crypto.
What’s Happening and Why It Matters
Tariffs are rising sharply – Trade is getting more expensive, the cost of living is increasing, and economic uncertainty is growing.
Wall Street is in panic mode – The Nasdaq has already corrected by -10%, markets are losing trillions, and investor sentiment is shaken.
The Fed isn’t rushing to cut interest rates – Liquidity remains tight, pressuring markets—and, of course, crypto.
Bitcoin as a hedge – If the U.S. economy continues to destabilize, BTC could gain ground as "hard money."
Major Impacts on Crypto
Bullish Scenario: If investors lose faith in the financial system due to economic turmoil, Bitcoin could act as a safe haven.
Bearish Scenario: If the Fed keeps rates high and institutional investors pull out of crypto, the market could take a heavy hit.
Altcoins are at greater risk – With reduced liquidity and higher volatility, low-cap projects will struggle.
What Should We Do Now?
Monitor the macroeconomic environment – Tariffs, Fed decisions, and market sentiment are key factors.
Bitcoin & Ethereum remain the strongest assets – If there’s a flight to safety, crypto blue chips will hold up better.
Avoid weak altcoins – Markets are becoming more selective, and projects without strong fundamentals could disappear.
U.S. – Inflation & the Fed
- February inflation data will be released on Wednesday.
- Markets are pricing in three Fed rate cuts in 2025.
- Tariffs and rising prices could keep inflation high.
Opportunity: If inflation exceeds expectations, the USD may strengthen temporarily, but the long-term trend suggests weakening.
Canada – BoC Decision
- The Bank of Canada announces its rate decision on Wednesday.
- A 0.25% rate cut is likely, with a 78% probability according to market forecasts.
Opportunity: If the BoC signals further cuts, the CAD may weaken.
Eurozone – German Fiscal Expansion
- The ECB may delay further rate cuts.
- Markets are evaluating Germany’s new fiscal package.
Opportunity: If investors believe the ECB won’t cut rates aggressively, the EUR may strengthen.
- UK – GDP Data
- January’s GDP data will be released on Friday.
- A 0.2% increase is expected, but outlook remains uncertain.
Opportunity: If the data beats expectations, the GBP could strengthen.
Japan – Wage Negotiations
- Annual wage hikes are expected at 6.09%, the highest level in 30 years.
Opportunity: If wage increases are strong, the JPY may gain as the BoJ could shift its policy.
Conclusion
- USD: Short-term strength, but long-term weakness.
- CAD: Potential decline if the BoC cuts rates.
- EUR: Strengthening if ECB rate cut expectations ease.
- JPY: Higher wages could boost the yen.
The question isn’t if there will be winners, but who will survive until the end.
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STOPIt's becoming increasingly clear that economic volatility is having a ripple effect on crypto markets too...
Yeah exactly