The hype around Trump has subsided since he took office, and it will take some time before there is more room for fermentation. The correlation between the price of BTC and the overall US economy has been further amplified by the market. Last week, BTC was affected by the scale of the tariff war launched by Trump and the slightly lower-than-expected employment report, with the price dropping from $102,000 to $97,000, a weekly decline of 6%, reflecting the flow of investment funds.
VX: TTZS6308
Ethereum, on the other hand, has performed very poorly due to the controversy and continued selling pressure from the foundation, with a weekly decline of 20% to $2,700. Other cryptocurrency sectors have also seen declines due to investors' withdrawal, with meme coins suffering the most severe losses, mostly over 40% weekly, reflecting the forced liquidation of highly leveraged trading positions under the impact of the broader market.
The waning of speculative sentiment is mainly due to the factor of Trump's tariff war. Initially, Trump took more aggressive tariff measures against Mexico, Canada and China than expected, causing market uncertainty to suddenly rise, and speculative capital also withdrew from the market, causing severe losses for meme coin-related tokens. Although Trump later announced a temporary truce in the tariff war, giving the governments a month to negotiate, the market had already been frightened, and speculative capital did not flow back into the market, so it did not receive the same strong buying support as BTC.
Although the Fed has lowered interest rates three times before, it has recently stated that it is in no hurry to further lower interest rates. This report shows moderate job growth and strong wage growth. The market expects the Fed to keep interest rates unchanged at its monetary policy meetings in March and May, with a probability of over 40% of a rate cut in June. The US is still in an interest rate cut cycle, and in this context, I believe the fundamentals of the crypto market are still quite good, it just needs more time to ferment, and there may be another wave of capital inflow later.
Fund companies scramble for the BTC pie, with interesting effects to come
Although the market is currently sluggish, the uncertainty brought by Trump is expected to continue to have a negative impact on trading sentiment, and the effect is expected to last until the market is numb. The previous Trump-themed market has already become numb, and the crypto market will certainly need to go through more uncertainty in the future, most of which will come from the overall economy. Global investors are all focused on how Trump's protectionism and new tariff policies will impact the global economy, and this concept brings uncertainty in trading.
However, the industry development of cryptocurrencies is growing rapidly, especially the competition for ETF applications. The XRP spot ETF has entered the review stage, and another news has emerged that the SEC has formally accepted Grayscale's application for a Solana spot ETF, which is the first time the SEC has accepted an application for an "ETF of a cryptocurrency that was once considered a security". Grayscale applied to convert its Solana trust fund to an ETF at the end of last year, and currently has over 7 million shares in circulation. After accepting the application, the SEC will decide whether to approve it within 240 days, which is a "positive development".
The Trump family may also enter the crypto fund market, and the SEC's positive attitude is particularly important at this time.
Last week, Trump's media and technology group (TMTG) submitted an application to register a new investment fund trademark for its financial technology brand Truth, planning to launch three investment products, including a "BTC-enhanced" ETF and SMA, to explore BTC-related strategies.
This basically also reveals that the BTC strategic reserve is not a fantasy. As long as BTC becomes a national strategic reserve of the US, it will also help boost the ETF products issued by Trump's own company. Furthermore, if Trump's own company enters the crypto market, in addition to providing a BTC ETF, it is more likely to expand the issuance of competitive coin ETFs in the future. Assuming this, the Trump government will have to open up the listing of more competitive coin ETFs in the crypto regulation, which is expected to help the subsequent rise in crypto prices. The potential token targets (XRP, LTC or SOL) in the near future may experience more significant price fluctuations due to regulatory changes.
