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Bitcoin Set for a Surge? Trump's Criticism of Interest Rates Hints at Major Shift
Bitcoin analysts are abuzz as President-elect Donald Trump voiced strong disapproval of the Federal Reserve’s current stance, labeling interest rates as “far too high” despite ongoing inflation concerns. Speaking from his Mar-a-Lago resort, Trump remarked, “We are taking over a challenging situation from the previous administration,” while accusing officials of seemingly trying to complicate matters for his incoming team.
These pointed comments, delivered just under two weeks before his inauguration, have fueled expectations of a potential pivot in U.S. monetary policy and sparked speculation about a potential boost for Bitcoin and other risk assets in the year ahead.
A Flashback to 2017: Weaker Dollar, Stronger Bitcoin?
Despite the changes in the economic and geopolitical landscape since Trump's initial term, some observers draw parallels to his rhetoric from 2017. At that time, Trump criticized the strength of the U.S. dollar, which he believed was detrimental to American competitiveness. The U.S. Dollar Index (DXY) peaked near 104 in early January 2017, followed by a downward trend that saw it dip to around 98 by early 2018.
This significant drop in the dollar coincided with a broader risk-on sentiment, driving rallies in both equity markets and the cryptocurrency space. Julien Bittel, Head of Macro Research at Global Macro Investor (GMI), highlighted this comparison on social media.
“The last time Trump mentioned something being ‘too high,’ it was the dollar in January 2017, just before his inauguration,” Bittel noted. He recalled Trump’s statement: “Our companies can't compete now because our currency is too strong. And it's hurting us.”
Trump's recent comments about the dollar’s strength being a “tremendous burden on U.S. businesses” suggest he remains acutely aware of the impacts of a strong dollar, similar to how high interest rates can affect exports, corporate earnings, and economic growth.
Potential Implications for Bitcoin and Crypto Markets
Bittel concluded that the last significant decline in the dollar set the stage for one of the most critical macroeconomic moves in recent years, spurring a surge in risk assets. “Could history repeat itself? We might see something similar unfold,” he speculated.
DXY Patterns: 2017 vs. Today
Bittel isn’t the only expert eyeing a potential peak in the DXY, reminiscent of its 2017 trajectory. Steve Donzé, Deputy CIO for Multi Asset at Pictet Asset Management Japan, shared a chart illustrating similar patterns in recent DXY movements compared to early 2017, suggesting a possible impending decline.
Financial analyst Silver Surfer (@SilverSurfer_23) also noted an intriguing timing parallel, highlighting that the DXY peaked on January 3, 2017—18 days before Trump's inauguration. In contrast, it appears to have peaked on January 2, 2025—19 days before his upcoming inauguration. He described this as “remarkable history repeating,” suggesting a correlation between the DXY’s behavior before both inaugurations.
Such observations are fueling predictions that another dollar downturn could create favorable conditions for risk assets. If the dollar indeed begins a new downtrend similar to 2017–2018, Bitcoin could benefit from increased liquidity and speculative interest.
At the time of writing, Bitcoin is trading at $94,950.