1. Trump's card: The confidence to control the game

In negotiations with Zelensky, Trump bluntly stated: "You have no cards left!" This not only shows his strong negotiating position but also implies that he holds ample leverage. Tariff policies, tax cut promises, energy independence strategies, and even political pressure on the Fed are all cards in his hand. Assuming Trump has "3 up cards for the year and 1 down card" (or "2 up and 2 down"), how would he play his cards? The answer is obvious: the down card first, the up card later, especially in the fourth year (2028), which must rise to ensure re-election or a dignified exit.

As soon as Trump took office, he unveiled tariffs as a big move, not to collapse the global economy, but to quickly burst the bubble and pave the way for revitalizing the U.S. economy. He may deliberately make 2025-2026 a "moment of despair" in the market, forcing out recession signals through short-term pain, and then in 2027-2028, leverage tax cuts, infrastructure, and possible monetary easing to turn things around, creating an image of an "economic savior." This strategy of "breaking before establishing" not only fits his style but also aligns with voters' expectations for "result orientation."

2. Why is it better to place the up card later?

The logic of placing the up card later is based on three simple yet profound points:

Voter's short-term memory: Psychological studies show that people's impressions of recent events are much stronger than those of earlier ones. Economic performance in election years (such as stock market gains, employment improvements) directly determines how votes are cast. Data shows that the success rate of U.S. presidents seeking re-election is highly correlated with GDP growth and unemployment rates in the fourth year.

Narrative dominance: The later rise allows Trump to claim, "I brought the economy back," easily covering up the early lows, constructing an inspirational story of rising from the bottom.

The opponent's dilemma: If the economy is strong in the fourth year, the opposition will find it difficult to find points of attack, maximizing Trump's political capital.

Of course, in reality, he cannot fully control the "card sequence"—the Fed's policies, global economic fluctuations, and unexpected events may disrupt the rhythm. But strategically, he is inclined to let 2025-2026 bear the downward pressure, and then concentrate on releasing upward momentum in 2027-2028.

3. Realistic considerations: The game in complexity

Trump's situation is more complex than theoretical models suggest. He cannot control the situation as precisely as playing poker: the Fed's independence, the backlash of global supply chains, and even domestic political resistance could skew his "cards." However, his style has always been "suffer first, then enjoy"—actively triggering short-term crises through tariff wars or debt adjustments, and then recovering losses with tax cuts and stimulus policies. This high-risk approach may further pressure the market in 2025 but also lays the groundwork for a rebound later.

4. What should we do? Opportunities in despair

The current market has entered a "moment of despair": on-chain asset crashes, secondary altcoins zeroing out, core assets (U.S. stocks, BTC) on the brink. Trump's radical policies undoubtedly exacerbate this panic, but his real goal is to reshape the U.S. economy, not to destroy the global market. For us ordinary investors, this is both a challenge and an opportunity.

Short-term strategy: Be patient and observe, keep cash. The market has not yet bottomed, liquidity contraction is still ongoing, and rushing to bottom fish may lead to being trapped.

Long-term perspective: Prepare for a rebound. Trump's "up card" and the Fed's "faucet" will eventually open; the key is to survive the current panic.

5. The logic of despair in the current market

The market collapse has its inherent logic:

Expectation reversal: Over the past two years, the market has rushed ahead of "Federal Reserve easing" (interest rate cuts + balance sheet expansion), with U.S. stocks and BTC soaring in 2023-2024. However, as easing expectations approach, the positive impacts have not brought new surprises, and investors have shifted focus to recession, inflation, and debt risks. Funds are withdrawing, liquidity expectations are deteriorating, just like "good news being doused."

Asset chain reaction: On-chain assets (DeFi, NFTs) and altcoins collapse first, signaling liquidity contraction. Pressure is now transmitting to U.S. stocks and BTC—BTC's correlation with the S&P 500 in a bear market is as high as 0.8; if U.S. stocks continue to decline, BTC is unlikely to stand alone.

Self-fulfilling expectations: When market participants "gamble on recession," they sell assets and hoard cash, further draining liquidity and accelerating price declines. The panic selling in 1929 and 2008 proves that expectations are not only results but also causes.

6. Timing for opening the "faucet"

When can we survive this round of "gambling recession"? The answer lies in the hands of the Fed. They are "observing" the market collapse as planned, waiting for three major signals:

Economic deterioration: Unemployment rate rises to over 5%, PMI falls below 45, consumer spending shrinks.

Market panic: VIX soars to 40+, U.S. stocks fall into a bear market (another 20% drop), and the yield curve inversion intensifies.

Inflation eases: CPI falls below 3% (currently about 3.5%), creating room for interest rate cuts.

As of April 8, 2025, U.S. stocks have evaporated $6.5 trillion, and BTC has fallen over 30% from its peak; panic is brewing. However, the unemployment rate has not spiraled out of control, and inflation has not yet been tamed, so the Fed may continue to "painfully observe." I expect the "moment of despair" to last until the second half of 2025, unless a catalyst occurs:

U.S. stocks may drop another 15-20%, triggering systemic risks (such as a banking crisis).

Unexpected decline in inflation, Fed eases ahead of schedule.

Trump pressures the Fed for easing (he has repeatedly criticized Powell and may use political means).

When will the real bull market arrive?

The liquidity valve has not opened, and the real bull market has yet to start. Historical experience shows that the Fed's shift from tightening to easing marks the starting point of a bull market:

In 2009, QE1 rescued the market, and the S&P 500 rebounded.

In 2020, with unlimited QE, BTC rose from 3,800 to over 60,000. This time, when recession expectations are "fully priced in" (S&P falls below 4,000, BTC below 40,000), the Fed will cut rates + expand the balance sheet, reigniting liquidity to revitalize the market.

Time window forecast

Pessimistic scenario: Recession intensifies (such as a runaway tariff war), the market hits bottom in Q3 2025, the Fed eases by the end of the year, and the bull market starts in early 2026.

Optimistic scenario: Inflation falls rapidly, the Fed cuts rates mid-year, and the market rebounds in Q4 2025, with a bull market arriving early.

Conclusion

Everything now is part of the plan of those who "control the faucet"—they are forcing recession signals out of market pain to pave the way for easing. The key to surviving this moment is "bad enough data" and "low enough asset prices." I tend to believe that the second half of 2025 is a turning point, at which point "things are gonna get a lot better." For us, patience is the best strategy—opportunity lies at the end of panic.