Trump, Bitcoin, and the Market Slump – What's Next?

Trump's election victory initially fueled bitcoin (BTC) demand on expectations of a pro-crypto shift. However, stalled progress on the Bitcoin Act has dampened expectations for a US Strategic BTC Reserve (SBR).

President Trump's election victory was initially viewed as a bullish factor for bitcoin (BTC), sparking anticipation for a pro-crypto shift and fueling demand for the apex coin. This optimism was further amplified by the introduction of the Bitcoin Act, although stalled progress on the bill has led to dampened expectations for a US Strategic BTC Reserve (SBR).

Senator Cynthia Lummis, known for her pro-crypto stance, unveiled the bill shortly after Trump's election win. The proposal suggested that the US government purchase one million BTC over a five-year period, with a mandatory 20-year holding period. This move was seen as a significant step towards mainstream adoption and had a positive impact on price predictions.

As the bill stalled, rendering the US government unable to intervene in the market, external market forces came into play, shaping the direction of BTC prices. Among these forces, US tariff developments were closely watched. Rising tariffs could drive up import prices, contributing to inflation and potentially delaying the Federal Reserve's efforts to cut interest rates.

President Trump's announcement of plans for 25% tariffs on European Union goods had a swift and substantial impact on the crypto market, leading to a decline in BTC and the broader crypto sector.

Highlighting the magnitude of the market downturn, the S&P 500 erased an impressive $500 billion of market capitalization within a matter of minutes following Trump's announcement, signaling a broader economic implication of the tariff plans.