Author: Revc
1. The Impact of Trump's New Term on the Crypto Market: The Interplay of Policies and Economics
With Trump's return to lead the US, the changes in the crypto market and related policies in 2025 have become a focus of investors' attention. Through tax cuts, deregulation, trade wars, and monetary policies in his first term, Trump drove the prosperity of the US stock market, gold market, and crypto assets. Now, with the approaching of his new term, Trump's policies, the power structure of Congress, and changes in the global economic environment will have a profound impact on the crypto market, further intensifying investors' anxiety and uncertainty.
Changes in Crypto Market Policies: From Skepticism to Support
In Trump's first term, the US government had a relatively conservative attitude towards the crypto market, especially in the regulation of crypto assets like Bitcoin. However, with the gradual acceptance of blockchain technology, Trump's policies have begun to shift towards supporting the crypto industry. It is expected that in his second term, Trump may introduce tax cuts and crypto-supportive policies to encourage market liquidity and boost investor confidence, further driving the rise of crypto assets.
Data-related:
- Bitcoin was around $1,000 when Trump took office in 2017, and reached close to $60,000 by 2021. Trump's supportive policies are expected to further drive the rise of Bitcoin.
- According to the CoinShares 2024 report, the interest of the US market in crypto assets has been rising year by year, and is expected to continue growing in 2025, especially driven by institutional investors.
The Power Structure of the House and Senate and the Interplay with the Crypto Market
Trump's new term will face political pressure from Congress, especially the Democratic-controlled House. In the November 2026 midterm elections, the Democrats may gain control of the House, which will constrain Trump's efforts to push crypto market-related policies, particularly in crypto asset regulation. Based on past experience, midterm elections are usually unfavorable for the ruling party, with the president's party on average losing more than 20 seats in the House and several seats in the Senate. However, Trump can still rely on Republican support in the Senate to push through some policies, especially in support of blockchain technology and crypto assets. The election results after 2026 are likely to have a significant impact on the policy implementation of the Trump administration.
Key Figures:
- Elizabeth Warren (Democrat): Has long advocated for stronger regulation of crypto assets, particularly in anti-money laundering, tax compliance, and market transparency.
- Brad Sherman (Democrat): Aligned with Warren, pushing for stricter anti-money laundering and financial stability measures.
Despite the pressure from Democratic figures, Trump's support in the Senate will still help drive policies for the crypto market.
2. Two Relatively Stable Investment Paths
In the current market uncertainty, investors can focus on the following two relatively stable investment paths: the AI Agent track and Trump-related concept tokens.
AI Agent Track: A Stable and Resilient Investment Direction
Amid market uncertainty, the AI Agent track has become a relatively stable investment direction. Several leading AI Agent projects have shown strong rebound ability during the correction period. For example, Virtuals Protocol has driven its market capitalization to $2.1 billion through technology updates and new collaborations, while other projects like AIXBT and Griffain have also performed well, driving price increases.
- Rebound and Resilience of the AI Agent Track
Although the crypto market as a whole faces correction risks, the AI Agent track has become one of the best-performing sectors. Several leading projects have shown strong recovery ability after experiencing corrections, with the highest rebound reaching 130%. For example, Virtuals Protocol has seen its market capitalization rebound to $2.1 billion after a significant correction, boosting market confidence and driving price increases.
- Technological Breakthroughs and Ecosystem Development of the AI Agent Track
The technological and ecosystem progress of AI Agent projects is one of the important reasons attracting investors. Virtuals Protocol has recently strengthened its ecosystem through collaborations with well-known brands like Animoca Brands and Illuvium. The project has driven the incentive mechanisms of its platform and ecosystem through cooperation with agent partners, providing a solid foundation for further ecosystem expansion.
- The Independent Trend of AI Agents and the Differences from Traditional Projects
Compared to traditional crypto projects, AI Agents have demonstrated more innovative capabilities in areas like operational governance, decentralized asset issuance, and technological applications. Benefiting from these innovations, the AI Agent track has attracted more risk-tolerant investors.
Trump-related Concept Tokens: Investment Opportunities and Market Momentum
With Trump's growing support for cryptocurrencies, several crypto projects related to him have emerged, the most notable of which is the WLFI (World Liberty Financial) token. Although the token terms and utility of WLFI are not ideal, its deep relationship with Trump and the Trump family's brand effect may provide additional market momentum.
On the other hand, while the performance of WLFI remains uncertain, more investors may focus on the projects chosen by Trump for collaboration. These projects, backed by the Trump concept, also have relatively strong fundamentals. For example, Ethereum (ETH), Aave (AAVE), Chainlink (LINK), and others have demonstrated strong market potential through collaborations with Trump. Particularly, the cooperation between World Liberty and platforms like Ethereum and Scroll may bring more on-chain data and cross-chain connectivity applications, providing strong support for the appreciation of related tokens.
In addition, market attention to the RWA (Real World Assets) concept is also increasing. Ondo Finance, as the leading project in the RWA track, has achieved significant gains recently. Trump's policies may accelerate the maturity of the RWA concept, driving more integration of physical assets and digital assets, and bringing new investment opportunities to the market.
3. Trading Barometer - Focus on the Impact of Economics (CPI Inflation) on the Fed's Decisions
The Fed's economic assessments, such as its evaluation of employment rates and inflation levels, may be interfered with by principal factors, especially in the context of the rapid changes in the current economic structure.
Disruption of Economic Indicators by Changes in Tech and AI Industries
With the rapid development of the tech industry, especially the fast rise of the AI sector, the demand for high-skilled labor has surged. At the same time, the demand for labor in traditional industries has slowed down, and even layoffs have occurred. This structural difference may distort the overall employment data. For example, the reduction of traditional industry jobs may be masked by the high-paying positions in emerging tech industries, leading to seemingly favorable overall unemployment rate data.
Interference Factors in the Fed's Economic Assessments
- Data Lag and Revisions: The lag and subsequent revisions of macroeconomic data may cause the Fed's judgments based on lagging data to deviate from the actual economic situation.
- Limitations of Single Indicators: The Fed's over-reliance on certain single economic indicators (such as core PCE inflation) may lead to biased assessments.
- Geopolitics and Unexpected Events: Geopolitical factors and unexpected events (such as natural disasters) can affect the economy, and these factors are usually difficult to predict, introducing uncertainty into the Fed's assessments.
Investor Strategies
Considering that the Fed's judgments may be influenced by multiple factors, investors can adopt the following strategies:
- Focus on Broader Data: Pay attention to detailed industry data, consumer confidence, corporate earnings, and more.
- Emphasize Micro-level Analysis: Conduct in-depth industry and company analysis to fully understand the economic and market conditions.
- Maintain Independent Thinking: Do not blindly rely on the Fed's assessments, but make decisions based on your own research.
- Manage Risks Properly: The crypto market is highly volatile, so manage your positions carefully and avoid over-investing.
4. Focus on the Bank of Japan's Interest Rate Hike Actions
The policy actions of the Bank of Japan (BOJ) have a significant impact on the global market. According to the latest data, the market's expectation for the BOJ to raise interest rates at its January 23-24 meeting is close to 99%. BOJ Governor Kazuo Ueda has stated that the possibility of a rate hike is high as confidence in wage growth strengthens.
The Impact of Interest Rate Hikes on the Global Market
A rate hike in Japan could lead to a strengthening of the yen, which in turn could affect global capital flows. Capital may flow out of high-risk assets (such as cryptocurrencies) and move towards more stable asset classes. Furthermore, the rate hike may lead to an adjustment in the arbitrage trading strategies of Japanese investors, affecting the liquidity and risk appetite of the global market.
Summary
Trump's return brings great uncertainty and potential to the market, especially with changes in policy, politics, and the economy. His policies are expected to drive up inflation, affecting US bond yields and gold prices, while also exacerbating global trade tensions, which could lead to stock market volatility. However, crypto assets may benefit from policy clarity and increased institutional participation, potentially seeing positive developments. Investors should pay attention to investment opportunities in the AI Agent sector and Trump-concept tokens, while flexibly adjusting their strategies to address the risks and opportunities brought about by policy changes, and seize the potential of short-term volatility and long-term growth.
