On August 5, the cryptocurrency market is in a highly tense 'calm before the storm.' Former U.S. President Trump will appear on CNBC's flagship program 'Squawk Box' for a live interview at 8:00 PM Beijing time (8:00 AM Eastern Time). The topics of this interview cover core areas such as the economy, employment, Federal Reserve policy, and tariffs. Industry insiders generally believe that his remarks are very likely to become a key lever to shift the cryptocurrency market landscape, and many investors are on high alert.
The deep connection between Trump's economic policies and cryptocurrencies
Looking back at the Trump administration, economic policies based on tax cuts, deregulation, and trade protectionism have already left a profound mark on the cryptocurrency market. After the large-scale tax cut bill in the U.S. was enacted in 2017, disposable income for businesses and individuals significantly increased, and data showed that net inflows into the cryptocurrency market grew by about 37% year-on-year that year, leading to a phase of explosive price increases for mainstream cryptocurrencies like Bitcoin. A relaxed regulatory environment also created fertile ground for innovation in cryptocurrency businesses, with blockchain startups sprouting up like mushrooms, and some regions even introducing cryptocurrency-friendly policies to drive rapid industry expansion.
However, the negative impacts of trade protectionism cannot be ignored. During the peak of the China-U.S. trade friction from 2018 to 2019, global economic growth expectations were downgraded, market panic spread, and the total market value of cryptocurrencies evaporated by over 40% in just three months, with safe-haven funds flooding into traditional safe assets like gold and the U.S. dollar.
Cryptocurrency trends under fluctuations in Federal Reserve policy expectations
Trump's ongoing criticism of Federal Reserve policy has always been an important variable affecting market expectations. Historical data shows that whenever Trump publicly criticizes the Fed's interest rate hike policy, the probability of rate cut expectations indicated by the CME FedWatch Tool significantly rises. The monetary policy of the Fed is intricately linked to the cryptocurrency market: during the pandemic in 2020, the Fed continuously cut interest rates and launched quantitative easing, causing the cryptocurrency market to soar, with Bitcoin's price skyrocketing from $7,000 at the beginning of the year to nearly $30,000 by the end of the year.
If Trump pressures the Fed again during the interview, market expectations for monetary policy will be reshaped. If the market forms expectations for a more accommodative policy, cryptocurrencies may rise due to the dual drive of capital inflows and safe-haven demand; conversely, if tightening expectations increase, the cryptocurrency market may face pressure from capital outflows.
Chain reaction triggered by tariff policies
Trump's tariff policy has always been the 'emotional switch' for the market. If he releases new tariff signals in an interview, the international trade situation will become tense again, and global economic growth expectations will also be hindered. Historical experience shows that when trade frictions intensify, investor risk appetite plummets, with high-risk assets like cryptocurrencies being the first to suffer.
Moreover, tariff policies will also have a direct impact on cryptocurrency businesses. The previous imposition of tariffs on imported crypto mining machines in the United States led to a surge in operating costs for some mining companies by 20% - 30%, forcing them to reduce their business scale or even relocate overseas, severely weakening industry competitiveness.
Countermeasures for the cryptocurrency market
In the face of impending market fluctuations, investors can refer to the following strategies:
Emotional management: Market volatility is a norm, avoid chasing highs or panic selling, and maintain rational decision-making.
Diversified investment: Build a diversified investment portfolio that includes mainstream cryptocurrencies, stablecoins, and traditional financial assets to spread non-systematic risks.
Real-time monitoring: Use professional platforms such as CoinMarketCap and TradingView to closely track interview dynamics and market reactions.
Strategy first: Establish a clear investment plan in advance, clarify entry, exit, and stop-loss points to avoid blind operations.
Professional consultation: When in doubt about market trends, seek advice from qualified investment consultants in a timely manner.
Conclusion
Trump's CNBC interview tonight is undoubtedly a 'key variable' for the cryptocurrency market. Market volatility carries both risks and opportunities. Only by staying calm, scientifically allocating resources, closely monitoring market trends, and effectively utilizing professional resources can investors secure their footing in this tumultuous market game and achieve stable asset growth.
