The Bitcoin market unexpectedly welcomed a 'black moment,' with prices plunging like a waterfall, quickly breaking below the critical psychological level of $75,000. The drastic price fluctuations caused countless investors' hearts to race, and panic spread throughout the market.
After Trump took office, a series of policies had a tremendous impact on the global economy, with the US economy bearing the brunt. US stocks fell into a comprehensive downturn, and the 'seven sisters' of the US stock market did not escape this disaster; even the stocks of companies closely related to Trump, such as those owned by Musk, plummeted nearly 40%. The sharp decline in US stocks was like a falling domino effect, quickly affecting the cryptocurrency market, leading to widespread despair in the entire crypto market.
The scale of US national debt is enormous, requiring annual interest payments of up to $1.2 trillion. This heavy debt burden is like a boulder pressing down on the shoulders of the US economy. After Trump took office, his top priority was to address the national debt issue. To achieve this goal, Trump did not hesitate to confront the world, implementing a policy of reciprocal tariffs, attempting to shift the economic crisis of the United States onto the interests of other countries, and fill the national debt gap.
To resolve the US national debt crisis, Trump has successively employed four tactics.
The first move is 'to cut costs and increase revenue' by significantly reducing the workforce to save expenses. However, this measure touched upon multiple interests and faced strong opposition from various sectors, ultimately failing to achieve substantial results.
The second move is 'debt swap,' which is essentially robbing Peter to pay Paul. This not only failed to fundamentally solve the debt problem but also exacerbated potential risks.
The third move is to 'default and run away,' but considering the status of the dollar as an international reserve currency, once a default occurs, the credibility of the dollar would collapse instantly, and the severe consequences would deter Trump from taking rash actions.
After encountering setbacks with the first three moves, Trump unleashed the fourth move — 'reciprocal tariffs.' Data shows that this measure generated an additional $600 billion in tax revenue for the US. Under the impact of the tariff crisis, the economies of some countries suffered heavy blows, allowing the US to reap the wealth of other nations, which somewhat alleviated its own fiscal pressure. Only with an improvement in the US economic situation can Trump's approval ratings be secured, and the US stock market and cryptocurrency market hope to see a turning point.
Meanwhile, to alleviate the pressure of national debt, Trump has been hoping for the Federal Reserve to cut interest rates. However, Fed Chairman Powell is more concerned about inflation and has ignored Trump's demands. In order to achieve his goals, Trump began taking various actions to pressure the Federal Reserve, trying to force Powell to comply. As the US economy became increasingly chaotic under Trump's policies, the pressure on Powell grew day by day. If Powell cannot withstand the pressure and chooses to cut interest rates, the US economy may usher in a turning point, and the current downturn in US stocks and cryptocurrencies may only be temporary. As long as the Federal Reserve continues to cut interest rates, the market is expected to experience a recovery.
In the current complex market environment, focus on two major signals:
Gold trend: Closely monitor whether gold continues to decline. A drop in gold prices may indicate that a large number of safe-haven assets are being offloaded, possibly to free up positions for buying into risk assets like US stocks and cryptocurrencies. This signal will provide important reference for the next steps in the market.
Progress of tariff negotiations: Next, countries will engage in tariff negotiations with the United States. If the negotiations yield positive results, the market is expected to gradually stabilize. Even if the market reaches its bottom, it may experience a period of volatile adjustment, and investors need not worry too much about missing the opportunity to buy at the bottom.