Pro-cryptocurrency Donald Trump secured the U.S. presidency over four months ago, and since then, the landscape has been marked by volatility in financial markets amid global uncertainties regarding tariffs, geopolitical conflicts, and ongoing tensions in the Middle East as well as between Ukraine and Russia.
Bitcoin (BTC) has seen a remarkable increase of over 23% since the election on November 5, hitting an all-time high of more than $109,000 at the end of January. While it experienced a subsequent drop of around 30% from that peak, it continues to be one of the top-performing assets. Strategy (MSTR), often viewed as a bitcoin derivative, has increased by 34%, showing a solid recovery under the Trump administration after previously experiencing a decline of about 60% from its November highs.
Conversely, Ethereum’s ether token (ETH) has suffered a decrease of as much as 18%, reflecting a broader lackluster performance in the cryptocurrency market. The Valkyrie Bitcoin Mining ETF has also faced difficulties, seeing a nearly 30% dip. However, investors have shifted funds into BTC, helping its dominance rate to rise by 2%, now exceeding 61%.
European stocks have outperformed those in the U.S. The German DAX index has climbed by 20%, and the UK’s FTSE 100 has gained 6%, while major indices in the U.S. like the Nasdaq and S&P 500 are both down about 2%. A recent analysis highlights a record fall in U.S. stock allocations. Gold has benefited from the prevailing uncertainty, continuously hitting new record levels, surpassing $3,030 for an 11% increase.
The U.S. Dollar Index (DXY), which tracks the dollar’s value against a selection of major currencies, remains stable. Nonetheless, the dollar has significantly weakened under Trump, offering some respite to risk assets and currencies such as the Euro and the British Pound.
Additionally, the U.S. 10-year Treasury yield has seen a slight drop to 4.2%, a critical figure the administration is monitoring closely. Oil prices have decreased by approximately 7% as the U.S. continues to assert its dominance in energy to lower energy costs.
Notably, some of the so-called “Magnificent 7” technology stocks are struggling, with NVIDIA (NVDA) down 16% and Tesla (TSLA) falling 6%.
### Detox in Progress?
Recent declines in Wall Street and the crypto markets have sparked speculation about potential supportive policies, often referred to as the “Trump put.” However, the administration seems prepared to accept short-term challenges in pursuit of long-term stability, aiming to alleviate the financial excesses seen during the Biden administration.
This reset is anticipated to bring about lower inflation, enhanced energy security, and reduced 10-year Treasury yields.
“Scott Bessent’s notion of a ‘detox period’ implies that a managed downturn may be on the horizon. Should that be the case, Trump’s strategy is evidently to fault the recession on Biden, utilize tariffs and crypto narratives to mitigate costs, and advocate for lower interest rates to stimulate growth in technology and AI. This approach reflects a philosophy of enduring temporary hardships for future gains,” stated Gracy Chen, CEO of Bitget, in an email.
Chen further noted, “In any case, I don’t foresee BTC dropping below $70,000—perhaps stabilizing between $73,000 and $78,000, which could present a prime opportunity for buyers considering an entry. In the next one to two years, BTC reaching $200,000 isn’t as improbable as many might think.”