Macro Interpretation: With Trump set to take office as US President again on January 20, 2025, the global financial market is facing a new round of policy uncertainty and challenges. We will deeply interpret the new monetary policy trends of major central banks around the world in the "Trump 2.0" era and explore their potential impact on the cryptocurrency market. By comparing and analyzing the monetary policy trends of the United States, Europe, Japan and emerging economies, we will analyze the changes in the global economic landscape under Trump's policy agenda, as well as the opportunities and challenges it brings to the crypto market.
Trump's re-election victory marks another major adjustment in the global political and economic landscape. His policy agenda after taking office, including tax cuts at home, tariff increases abroad, large-scale deportations of immigrants, and relaxation of cryptocurrency regulations, will have a profound impact on the global economy and financial markets. Against this backdrop, the monetary policies of major central banks around the world are also showing new trends and divergence.
2. New trends in monetary policy of major central banks around the world.
1. United States: The path of interest rate cuts may change.
After Trump's re-election, the Fed's monetary policy path may encounter more variables. Although the Fed has cut interest rates several times in 2024, facing the inflationary pressure that Trump may bring, its pace of interest rate cuts may become cautious. Trump's domestic tax cuts, foreign tariffs, and large-scale deportations of immigrants may further stimulate domestic demand and push up inflation. This makes the Fed face more challenges in balancing economic growth and inflation. In the future, the Fed's monetary policy adjustments will rely more on the performance of economic data and policy evaluation results, and the interest rate cut path may therefore be variable.
(ii) Europe: The rate cut is expected to exceed that of the United States.
Compared with the Federal Reserve, the European Central Bank may cut interest rates more significantly in 2025. The euro zone continues to be under pressure from economic weakness, and Trump's trade disputes may cause further damage to the European economy. Therefore, it is necessary for the European Central Bank to continue cutting interest rates to stimulate economic growth and ease inflationary pressures. It is expected that the European Central Bank will cut interest rates at a much higher rate than the Federal Reserve in 2025, and the interest rate gap between the United States and Europe may further widen.
(III) Japan: The dovish stance is difficult to change.
The Bank of Japan may find it difficult to change its dovish stance after Trump's re-election. Although Japan's economy is gradually recovering, core inflation is rising only at a moderate pace, which makes the Bank of Japan cautious about raising interest rates. It is expected that the Bank of Japan is unlikely to take further measures until at least mid-2025, and the pace of its interest rate hikes may be very slow.
(IV) Emerging economies: Monetary policy divergence intensifies.
Monetary policies of emerging economies will become more differentiated after Trump's reelection. Some economies may face challenges such as export obstruction and economic growth slowdown due to Trump's trade policies, and thus adopt interest rate cuts to stimulate economic growth. Other economies may have to maintain or tighten monetary policies due to rising inflationary pressures.
3. The Impact of “Trump 2.0” on the Cryptocurrency Market
1. Policy relaxation brings market opportunities.
Trump has made it clear in his policy agenda that he will relax cryptocurrency regulation, which may bring unprecedented development opportunities to the cryptocurrency market. On the one hand, policy relaxation will reduce the compliance costs of the cryptocurrency market and promote market innovation and development; on the other hand, Trump plans to explore measures such as using #比特币 to repay national debt, which will further enhance the status and influence of cryptocurrency in the global financial system.
(2) Inflation pressure affects market trends.
However, Trump's tax cuts and tariff increases may also increase inflationary pressure in the United States, which will have a negative impact on the trend of the cryptocurrency market. Rising inflation will increase investors' risk aversion demand, which may cause funds to flow from high-risk assets (such as cryptocurrencies) to low-risk assets (such as gold, bonds, etc.). This will increase the volatility of the cryptocurrency market and may suppress its long-term upward trend.
(3) Geopolitical risks exacerbate market uncertainty.
Trump's uncertainty in foreign policy may also bring risks to the cryptocurrency market. His plans to end the conflicts between Russia and Ukraine and Israel and his pressure on NATO and other allies to increase military spending may lead to escalation of geopolitical tensions. This will increase the volatility of global financial markets and may have an impact on the cryptocurrency market.
4. Conclusion and Outlook
In the "Trump 2.0" era, the monetary policies of major central banks around the world are showing new trends and divergence. Faced with the uncertainties and challenges brought about by Trump's policy agenda, investors should pay close attention to changes in the global economy and financial markets, as well as the dynamics of the cryptocurrency market. In terms of investment decisions, investors are advised to rationally allocate asset portfolios to cope with potential risks. At the same time, policymakers should also strengthen communication and coordination to jointly maintain the stability and development of the global financial market.
In the future, with the further recovery of the global economy and the continuous development of the financial market, the cryptocurrency market is expected to achieve more robust development driven by factors such as policy relaxation and technological innovation. However, investors still need to be wary of the potential risks and challenges brought about by Trump's policy agenda and the impact of geopolitical situations on financial markets. Under the trend of divergence in monetary policies of global central banks, investors should pay more attention to the formulation and implementation of risk management and asset allocation strategies.
BTC data analysis:
The picture shows #coinank data, historical price of Bitcoin.
It’s the 16th anniversary of the birth of the Bitcoin Genesis Block. Happy 16th birthday to BTC!
If October 31, 2018, when the Bitcoin white paper was released, is the day Bitcoin was conceived, then I think the day when the Bitcoin Genesis Block was mined by Satoshi Nakamoto is its birthday.
The Bitcoin Genesis Block was mined by Satoshi Nakamoto on January 3, 2009 (UTC+8 time January 4, 2009 02:15:05), with a block reward of 50 BTC. As of today, it has been 16 years since its creation, and the current total Bitcoin block height has reached 877,630.
Coinank data showed that the US spot #比特币ETF had a net outflow of US$248 million yesterday.
Since December 19, 2024, the ETF as a whole has shown a net outflow trend, with only two trading days of net inflows, and on one of those trading days the inflow was only US$5.3 million, which is almost negligible.
I think it may be related to two factors. One is that the U.S. stock market had formed a stage top before that, and the other is that the BTC price also peaked at $108,350+ the day before.
As a result of these two factors, market sentiment and confidence may be affected. Investors' concerns about market volatility, especially after the Bitcoin price has experienced a significant rise, may cause investors to choose to take profits at high prices, and they may also have short-term concerns about the market. Adjustment expectations, thereby triggering capital outflows.
It is worth noting that despite the outflow of funds from ETFs, the overall fundamentals of the Bitcoin market remain strong, including the net inflow of Bitcoin ETFs reaching $3.566 billion in 2024, showing that long-term investors are still interested in Bitcoin. This short-term outflow of funds may be part of the natural adjustment of the market, and the long-term trend still needs to focus on the fundamentals of Bitcoin and changes in market sentiment. For example, MicroStrategy increased its holdings of BTC and its strategic reserves of Bitcoin.
