Author: Revc
1. The impact of Trump's new term on the crypto market: the game between policy and economy
With Trump's return to lead the United States, changes in the crypto market and related policies in 2025 have become the focus of investors' attention. Trump's first term promoted the prosperity of the US stock market, gold market and crypto assets through tax cuts, deregulation, trade wars and monetary policies. Now, as the new term approaches, Trump's policies, the power structure of Congress and the changes in the global economic environment will have a profound impact on the crypto market, and investors' anxiety and uncertainty have also increased.
Crypto market policy changes: from suspicion to support
In Trump's first term, the US government's attitude towards the crypto market was relatively conservative, especially in the regulation of crypto assets such as Bitcoin. However, with the gradual acceptance of blockchain technology, Trump's policies began to shift to support the crypto industry. It is expected that in his second term, Trump may encourage market liquidity and boost investor confidence through tax cuts and crypto-supportive policies, further supporting the rise of crypto assets.
Data related:
- Bitcoin has risen from about $1,000 when Trump took office in 2017 to nearly $60,000 in 2021. It is expected that the support of Trump's policies will further promote the rise of Bitcoin.
- According to the CoinShares 2024 report, the interest in crypto assets in the US market has increased year by year, and it is expected to continue to grow in 2025, especially driven by institutional investors.
The power structure of the Senate and the House of Representatives and the game of the crypto market
Trump's new term will face political pressure from Congress, especially the Democratic-controlled House of Representatives. In the mid-term elections in November 2026, the Democrats may control the House of Representatives, which will restrict Trump's promotion of policies related to the crypto market, especially in terms of crypto asset regulation. Based on past experience, mid-term elections are usually unfavorable to the ruling party, with the president's party losing an average of more than 20 seats in the House of Representatives and several seats in the Senate. However, Trump can still rely on the support of the Republicans in the Senate to promote some policies, especially support for blockchain technology and crypto assets. It is expected that the election results after 2026 may have a significant impact on the policy implementation of the Trump administration.
Key Figures:
- Elizabeth Warren (Democratic Party): has long advocated for stronger regulation of crypto assets, especially in anti-money laundering, tax compliance and market transparency.
- Brad Sherman (Democratic Party): Consistent with Warren, promotes stricter anti-money laundering and financial stability measures.
Despite pressure from Democratic figures, Trump's support in the Senate will continue to help promote policies in the crypto market.
2. Two relatively stable investment routes
In the current market uncertainty, investors can focus on the following two relatively stable investment routes:AI Agenttrack and Trump concept tokens.
AI Agent track: a stable and resilient investment direction
With the uncertainty of the market, the AI Agent track has become a relatively stable investment direction. Multiple head AI Agent projects have shown strong rebound capabilities during the callback. For example, Virtuals Protocol has driven the market value back to US$2.1 billion through technical updates and new cooperation, and other projects such as AIXBT and Griffain have also performed well, driving prices up.
- Rebound and resilience of AI Agent track
Despite the risk of a pullback in the overall crypto market, the AI Agent track has become one of the best performing sectors. After experiencing a pullback, many leading projects have shown strong recovery, with the rebound reaching up to 130%. For example, after a sharp pullback, Virtuals Protocol updated its mechanism to bring its market value back to $2.1 billion, which boosted market confidence and drove price increases.
- Technological breakthroughs and ecological development of the AI Agent track
The progress of AI Agent projects in technology and ecology is one of the important reasons why they attract investors. Virtuals Protocol has recently further strengthened its ecosystem construction through cooperation with well-known brands such as Animoca Brands and Illuvium. Through collaboration with agent partners, the project has promoted the incentive mechanism of the platform and ecosystem, further providing a solid foundation for ecological expansion.
- The independent trend of AI Agent and the difference between traditional projects
Compared with traditional crypto projects, AI Agent has shown more innovative capabilities in operational governance, decentralized asset issuance, and technology applications. Thanks to these innovations, the AI Agent track has attracted more investors with high risk preferences.
Trump concept tokens: investment opportunities and market momentum
With Trump's gradual support for cryptocurrencies, multiple crypto projects related to him have begun to emerge, the most notable of which is the WLFI (World Liberty Financial) token. Although the terms and utility of WLFI's tokens are not ideal, its deep relationship with Trump and the brand effect of the Trump family may provide WLFI with additional market momentum.
On the other hand, despite the uncertainty of WLFI's performance, more investors may pay attention to the cooperation projects chosen by Trump. These projects are backed by the Trump concept and also have strong fundamentals. For example, projects such as Ethereum (ETH), Aave (AAVE), and Chainlink (LINK) have shown strong market potential through cooperation with Trump. In particular, World Liberty's cooperation with platforms such as Ethereum and Scroll may bring more on-chain data and cross-chain connection applications, which provides strong support for the rise of related tokens.
In addition, the market's attention to the concept of RWA (Real World Assets) is also increasing. As the leading project in the RWA track, Ondo Finance has achieved significant gains in the recent period. Trump's policies may accelerate the maturity of the RWA concept, promote the combination of more physical assets and digital assets, and bring new investment opportunities to the market.
3. Trading Vane——Pay attention to the impact of the economy (CPIinflation) on the Fed's decision
The Fed's economic judgment, such as its assessment of employment and inflation levels, may be disturbed by the main component factors, especially in the context of the current rapid changes in the economic structure.
The interference of employment changes in the technology and AI industries on economic indicators
With the booming technology industry, especially the rapid rise of the AI field, the demand for high-skilled labor has surged. At the same time, the demand for human resources in traditional industries has slowed down, and even layoffs have occurred. This structural difference may cause distortion of the overall employment data. For example, the reduction of jobs in traditional industries may be masked by high-paying jobs in emerging technology industries, resulting in seemingly good overall unemployment data.
Interference factors in the Fed's economic judgment
- Data lag and revision: The lag and late revision of macroeconomic data may cause the Fed's judgment based on lagged data to deviate from the actual economic situation.
- Limitations of a single indicator: The Fed's over-reliance on certain single economic indicators (such as core PCE inflation) may lead to one-sided judgments.
- Geopolitics and emergencies: Geopolitics and emergencies (such as natural disasters) will affect the economy. These factors are usually difficult to predict, bringing uncertainty to the Fed's judgment.
Investor response strategies
Considering that the Fed's judgment may be affected by many factors, investors can adopt the following strategies:
- Pay attention to a wider range of data: Pay attention to detailed industry data, consumer confidence, corporate profits, etc.
- Pay attention to micro-level analysis: Through industry and company analysis, fully understand the economic and market conditions.
- Maintain independent thinking: Do not blindly rely on the judgment of the Federal Reserve, and make decisions based on your own research.
- Do a good job of risk management: The crypto market is volatile, so do a good job of position management and avoid over-investment.
4. Pay attention to the Bank of Japan's interest rate hike
The policy trends of the Bank of Japan have a significant impact on the global market. According to the latest data, the market's expectation for the Bank of Japan to raise interest rates at the meeting on January 23-24 is close to 99%. Bank of Japan Governor Kazuo Ueda said that as confidence in wage growth increases, the possibility of an interest rate hike is very high.
Impact of interest rate hikes on global markets
Japan's interest rate hikes may lead to an appreciation of the yen, which in turn affects global capital flows. Funds may flow out of high-risk assets (such as cryptocurrencies) and turn to more stable asset classes.In addition, interest rate hikes may lead to adjustments in carry trading strategies of Japanese investors, affecting liquidity and risk appetite in global markets.
Summary
Trump's return has brought huge uncertainty and potential to the market, especially under the multi-faceted changes in policies, politics and economy. His policies are expected to drive inflation higher, which will in turn affect US Treasury yields and gold prices, while exacerbating global trade tensions, which may trigger stock market volatility. However, crypto assets may benefit from policy clarification and increased institutional participation, and may usher in positive news. Investors should pay attention to investment opportunities such as the AI Agent track and Trump concept tokens, and flexibly adjust strategies to cope with the risks and opportunities brought about by policy changes, and seize short-term volatility and long-term growth potential.
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