Trump Policy Impact on Global Finance and Crypto Markets: Analysis and Future Outlook

Since Trump returned to office in 2024, his “America First” policy measures have continuously impacted the global financial system. Recently, Trump implemented tough policies in trade, tariffs, immigration, and fiscal expansion. These policies have not only triggered severe volatility in traditional financial markets—causing a significant pullback in U.S. stocks and a temporary weakening of the dollar index—but have also affected the crypto market, with multiple crypto asset indicators hitting new lows. Meanwhile, the Fed’s rate-cut cycle has slowed, and the global economy faces multiple challenges. This article analyzes Trump’s policy sustainability, possible market turning points, and future trends from macroeconomic, financial market, crypto market, and technology cycle perspectives, and offers data-driven strategy recommendations for crypto investors.

Trump Policy Continuity and Global Financial Landscape Shifts

1. Policy Background and Key Initiatives
   Since early 2025, the Trump administration has adhered to an “America First” strategy, with key measures including:

   • Tariff Upgrades: Increasing tariffs on imports from major trading partners such as China, the EU, Canada, and Mexico, raising global supply chain costs and indirectly impacting inflation expectations.
   • Immigration Restrictions: Tightening work visa policies, exacerbating U.S. labor shortages and further driving up wages in the service sector.
   • Fiscal Expansion: Stimulating short-term economic growth through corporate tax cuts and large-scale infrastructure investments, which, although causing the debt-to-GDP ratio to exceed 135%, have boosted corporate profit expectations (e.g., through AI technology applications).

   Additionally, on March 7, 2025, Trump signed an executive order that officially incorporated Bitcoin into the national strategic reserve asset framework, aiming to enhance Bitcoin’s status as “digital gold” and provide a new hedging tool for the financial market. Regulatory agencies (such as the OCC) have also recently eased restrictions on U.S. banks’ participation in crypto business, further driving traditional financial institutions to venture into digital assets.

2. Global Financial and Trade Ripple Effects
   Trump’s policies have profoundly influenced global finance and trade:

   • Asset Diversification Trend: Global central banks and large institutions are beginning to diversify risk by allocating digital assets such as Bitcoin, putting traditional reserve assets under pressure from digital assets.
   • Trade Friction and Supply Chain Restructuring: Hardline trade policies are forcing a reorganization of global supply chains, prompting countries to accelerate technological innovation and multilateral cooperation to mitigate uncertainties arising from unilateral tariffs.
   • Deeper Integration of Financial Institutions and Digital Economy: Major U.S. banks and hedge funds are gradually entering the crypto market, supplementing global financial liquidity in the new digital asset arena.

U.S. Stock Market Pullback and Market Signals

1. Overview of Market Pullback Data
   Recently, the U.S. stock market experienced significant corrections:

   • S&P 500 Index: Fell from approximately 6000 to around 5670 points, a decline of over 5%.
   • NASDAQ 100 Index: Dragged down by technology stocks, dropping from 22000 to 19660 points (about a 10% decrease).
   • Dow Jones Industrial Average: Fell between 7% and 8%.
   • VIX (Fear Index): Rose to around 23, indicating increased market fear and significantly higher trading volumes.

2. Reasons for the Stock Market Decline and Policy Expectations
   The U.S. stock pullback was primarily driven by:

   • Weaker Macroeconomic Outlook: Recent employment data, consumer confidence, and manufacturing PMI all fell short of expectations, exposing a lack of growth momentum.
   • Diminished Rate-Cut Expectations: Although the Fed had cumulatively cut rates by about 100 basis points previously, future rate cuts appear increasingly unlikely, raising doubts about the sustainability of low-interest-rate benefits.
   • Trade Policy Uncertainty: The Trump administration’s hardline trade measures have increased market uncertainty regarding global economic recovery.

Overall, the market reflects a cautious attitude toward economic prospects and the sustainability of policies in the short term, while waiting for improvements in economic data and corporate earnings to potentially trigger a structural rebound.

Crypto Market Indicators Hitting New Lows and Cycle Analysis

1. Overall Downtrend in the Market
   In the wake of the significant pullback in traditional financial markets, the crypto market has also not been spared and shows marked sluggishness:

   • Bitcoin Price: Recently fell below its previous support level, at times dropping below $80,000, indicating a cyclical adjustment.
   • Global Crypto Market Cap: Declined from the previous $3 trillion to approximately $2.63 trillion, a drop of around 12%.
   • Trading Volume and Leverage Data: Major exchanges experienced significant declines in daily trading volumes, and leverage data indicate a strong institutional wait-and-see sentiment.
   • Fear & Greed Index: The crypto market’s fear index has dropped to an extreme panic zone, reflecting severely diminished investor confidence.

2. Historical Cycles and the Dollar Index Dynamics

   • Bitcoin Dollar Index Cycle: Historical data show that during the bear market in 2015, an extreme drop in the dollar index presaged Bitcoin’s rebound; while the current dollar index has fluctuated recently, rising Fed rate cut expectations may eventually lead to depreciation of the dollar, providing inflows of safe-haven funds into Bitcoin.
   • Dollar Index (DXY): Recently fluctuated within the 102-106 range, sometimes strengthening then falling, its overall performance closely related to macroeconomic data and risk-averse demand. Although the current dollar index suppresses Bitcoin in the short term, over the long term, especially since Trump returned to office, the two have shown a weak positive correlation.

Fed Rate Cut Outlook and Economic Analysis

1. Review of Fed Policies
   Since the end of 2024, the Fed has cumulatively cut rates by about 100 basis points, bringing the benchmark rate close to historical lows. However, the latest economic data indicate that:

   • The core PCE inflation rate rose to 3.1% in January 2025, well above the 2% target;
   • Economic growth indicators have been lackluster, with some data showing GDP growth of only about 2.8% (Q1 2025 data);
   • Future rate cut expectations have been reduced from an anticipated four adjustments to only possibly two (in July and December), with policy rates expected to remain between 4.25% and 4.5%.

2. Dual Impact of Rate Cuts on the Market

   • Traditional Financial Markets: Rate cuts lower financing costs, but if market confidence does not recover sufficiently, capital outflows and increased asset price volatility could result.
   • Crypto Markets: A low-interest-rate environment typically favors risk assets, and in the medium to long term, Bitcoin’s attractiveness as “digital gold” will increase. However, the current sluggishness in crypto market data indicates that short-term uncertainty due to macroeconomic factors and institutional caution remains.

Impact on Crypto Markets and Trading Strategy Recommendations

1. Deep Impact on the Crypto Market
   The combination of Trump’s policies and the Fed’s rate cut environment constitutes a significant backdrop for the current crypto market:

   • Long-Term Upside: Recognition of national strategic reserves, increased institutional participation, and low rate expectations are likely to gradually drive a recovery in Bitcoin and other digital assets;
   • Short-Term Risks: The substantial pullback in U.S. stocks and new lows in crypto market data indicate that short-term volatility and panic remain high. Data show that the BTC perpetual contract funding rate has fallen to 0.004%—an 85% drop from its peak—raising the risk of short squeezes. The Fear & Greed Index for crypto has dipped into extreme fear levels, suggesting that the market is currently near a bottom.

2. Trader Operation Recommendations
   Given the current market environment, traders are advised to adopt the following strategies:

   • Bottom Validation and Accumulation:
     Monitor the Fear Index (e.g., CMC Fear & Greed Index) and on-chain data such as miner capitulation rates and BTC perpetual contract funding rates. If these indicators show clear signs of adjustment, consider accumulating in phases while implementing strict stop-loss measures.
   • Diversified Asset Allocation:
     Allocate investments across major cryptocurrencies (Bitcoin, Ethereum) and select quality project tokens (e.g., those with substantial DeFi or Layer 2 applications) to mitigate risks from any single asset’s volatility.
   • Strict Position Management and Risk Control:
     Use stop-loss, take-profit, and position management strategies. Employ technical indicators such as RSI and MACD to determine if the market is oversold or overbought, and adjust positions accordingly to guard against sharp market swings.
   • Cycle and Technical Indicator Reference:
     Combine Bitcoin cycle theory with historical trends in the dollar index to monitor potential market turning points. Additionally, track indices like the VIX and CMC Fear & Greed Index along with macroeconomic and policy updates to assess market risk and capital flows.

Future Outlook and Turning Point Predictions

1. Policy and Market Turning Points
   Trump’s policies exert dual effects—stimulating trade and inflation in the short term while promoting asset diversification and institutional participation in the long term. Over the next 3–6 months, improvements in U.S. economic data, corporate earnings, and Fed policy dynamics will determine whether the market experiences a turning point:

   • If U.S. economic indicators improve and corporate earnings rebound, coupled with gradual increases in institutional digital asset accumulation, both stock and crypto markets may see a structural rebound;
   • Conversely, if global trade frictions intensify and macroeconomic risks worsen, market panic may deepen, heightening the risk of a second bottom.

2. Symbiotic Relationship Between the Dollar and Bitcoin
   As U.S. national debt rises (potentially surpassing $40 trillion) and the era of policy-driven rate cuts comes to an end, the dollar’s hegemony may loosen. Over the medium to long term, Bitcoin’s role as an inflation hedge is likely to become more pronounced, with its long-term weak negative correlation with the dollar index possibly strengthening. Investors should note that:

   • In the short term, a stronger dollar may suppress Bitcoin’s price, but if Trump’s crypto and trade policies remain dominant, a short-term positive correlation between the dollar index and Bitcoin could emerge;
   • In the long run, as global reliance on the dollar declines, Bitcoin and other digital assets may attract more institutional funds, becoming a crucial component of asset allocation.

3. Advancements in Regulation and Technological Innovation
   The SEC is expected to approve more Bitcoin ETFs in Q2 2025, potentially attracting an estimated additional $20 billion in institutional funds. Concurrently, breakthroughs in Layer 2 and modular blockchain technologies will further enhance crypto market trading efficiency and reduce the volatility of Gas fees. As the regulatory framework becomes more refined, market transparency and compliance will improve, creating favorable conditions for long-term capital inflows.

4. Economic Structural Adjustments and Market Volatility under U.S. Policy Shifts
   Trump has repeatedly emphasized that his primary task is to build a strong America, regardless of short-term stock market fluctuations. He stated, “Building a strong America is what I must do—I have no time to worry about the stock market. China is planning for a century, but America plans quarterly; that won’t work. I must do what’s right.” In a March 9 Fox News interview, he noted that tariffs and trade policies might cause “some turbulence,” even suggesting that the economy might contract this year, emphasizing that such large-scale reforms will inevitably experience a transitional phase, with the core goal being to bring wealth back to the U.S.

   Deutsche Bank analyst Jim Reid also noted that although the market was relatively calm over the weekend, comments from Bessent and Trump indicated that they were prepared for the economic adjustment pains. Bessent mentioned that as public spending shifts to private spending, the market will undergo a “withdrawal phase,” while Trump added that the stock market does not fully reflect the progress of reforms.

Overall, these statements suggest that the U.S. is entering a period of painful economic adjustment. For investors, despite short-term market volatility, it is essential to focus on the positive long-term effects of structural reforms.

Future Outlook

Trump’s policies following his return to office—including designating Bitcoin as a national strategic reserve asset, encouraging banks to engage in crypto business, and adopting a loose monetary policy in tandem with Fed rate cuts—send a positive long-term signal to global financial and crypto markets. However, the recent sharp pullback in U.S. stocks and record-low crypto market data indicate that the short term remains fraught with uncertainty and volatility.

For crypto investors, the market is at a critical turning point. Despite significant short-term volatility, in the long run, a low interest rate environment, national strategic support, and institutional capital inflows will create new upward opportunities for digital assets. Investors are advised to remain rational, diversify their portfolios through buying on dips, and implement strict risk controls while closely monitoring macroeconomic data, Fed statements, and the periodic signals from the dollar index and Bitcoin cycles.

In summary, seeking structural opportunities amid uncertainty, with the sustainability of Trump’s policies and the emergence of future economic turning points, will provide investors with a new investment perspective. At this stage, combining macroeconomic indicators, technical analysis, and market sentiment data to devise flexible and robust investment plans is key to preserving and growing assets amidst volatility.

For more in-depth market analysis, please refer to the JuCoin Research Institute.