Trump calls for a bull market, but cryptocurrencies plummet by $4000

Trump stated that the stock market would rise driven by positive economic news and promised to announce “great numbers.” But ironically, the market’s performance over the past two days has starkly contrasted this optimistic expectation. According to the latest news, the cryptocurrency market is experiencing a significant correction, with mainstream assets like Bitcoin and Ethereum falling sharply, and the scale of long positions liquidated reaching a new record for the year.

The Huge Contrast Between Speech and Reality

Trump’s Positive Signal

President Trump stated that he would promote positive economic news to drive the stock market higher. This statement sent a clear optimistic signal, implying that his policies would provide positive support to the market.

The Market’s Actual Response

However, the market’s actual performance was the opposite. According to data from January 19, the cryptocurrency market experienced a collective crash:

• Bitcoin quickly fell from last week’s high of $97,000 to $92,000, a drop of over $4,000
• Ethereum lost the $3,200 support level
• Total long liquidation across the network exceeded $800 million, setting a new record for the year
• Total cryptocurrency market cap declined by 2.8% to $3.217 trillion

The True Drivers Behind the Market Crash

Escalation of Tariff Wars

Trump threatened to impose tariffs on eight European countries opposing U.S. plans to take over Greenland, initially at 10%, with plans to increase to 25% starting in June. This move directly triggered market panic:

• European stock markets opened sharply lower: Euro Stoxx 50 down 1.7%, Germany DAX down 1.3%
• Concerns over trade wars intensified, with investors flocking into gold and other defensive assets
• Gold broke through $4,630, hitting a historic high

Geopolitical Risks Intensify

Disputes over Greenland and renewed tensions over U.S.-Europe tariffs, coupled with the blockage of the CLARITY bill in the Senate, caused a rapid cooling of short-term risk appetite.

Uncertainty at the Federal Reserve

The appointment of the Federal Reserve Chair has changed, with market expectations shifting from “dovish” to “hawkish.” The probability of former Fed Governor Kevin Warsh becoming the next Fed Chair has surged to about 60%, increasing expectations of future monetary tightening.

The Cryptocurrency Market’s Real Dilemma

Sentiment vs. Fundamentals

Analysts point out that the current situation resembles a emotional correction triggered by profit-taking at high levels, rather than a trend reversal. However, behind this emotional correction lies deep investor concerns about the uncertainty of Trump’s policies.

The “Trump Moment” in the Industry Is Over

It is worth noting that Yat Siu, co-founder of Animoca Brands, stated that the “Trump moment” in the crypto industry has ended. The next phase will be driven by real users, solid infrastructure, and regulation, rather than individual influence. This indicates that market expectations of Trump’s policies are beginning to return to rationality from their peak.

Summary

Trump’s positive rhetoric sharply contrasts with market reality. Although he promises economic benefits and stock market gains, factors such as escalating tariffs, geopolitical risks, and Fed policy uncertainty are suppressing market sentiment. The recent performance of the cryptocurrency market indicates deep skepticism about the actual impact of Trump’s policies. The key going forward is whether these positive news can truly be realized and whether policy uncertainties can be alleviated. In the short term, the market may continue to seek direction amid high volatility.