The crypto market has entered a new phase of volatility—one where Donald Trump’s political actions appear to have a stronger impact than even the U.S. Federal Reserve (The Fed).
Since Trump’s return to the White House, investor sentiment in digital assets has shifted dramatically, with major price swings following his policy announcements rather than central bank decisions.
Market Turns Against Expectations After Fed’s Rate Cut
On October 29, The Fed announced a rate cut to 3.75%–4%, a move that typically injects optimism into risk assets like Bitcoin (BTC). Yet this time, the opposite happened:
Bitcoin dropped to around $109,000, defying the historical trend where lower interest rates tend to lift crypto valuations.
This inversion in market behavior suggests that macroeconomic tools—once powerful drivers for digital assets—are losing their influence amid rising geopolitical uncertainty and Trump’s unpredictable economic maneuvers.
Trump’s Tariff Policies Ignite Massive Liquidations
The turning point came earlier on October 10, when President Trump unveiled sweeping tariffs on China. The announcement triggered what analysts described as one of the largest liquidation events in crypto history, wiping out over $19.16 billion in positions across major exchanges.
When Trump later delayed tariffs for dozens of countries, Bitcoin staged an impressive rebound—jumping 12% from $74,588 to $83,565—demonstrating just how reactive digital assets have become to political developments rather than economic indicators.
Fed Data No Longer Moves the Market
Even strong macroeconomic data failed to move the needle. U.S. inflation rose 3% in October, but Bitcoin prices remained largely stagnant—an unusual reaction for an asset often seen as an inflation hedge.
This suggests that Trump’s policies now command greater market attention than traditional drivers like inflation, interest rates, or central bank guidance.
Crypto investors appear to be treating Trump’s trade and foreign policy announcements as real-time market catalysts, overshadowing the Fed’s typical influence on asset prices.
A New Era of Political Dominance in Crypto Markets
Historically, Federal Reserve decisions have been among the most critical factors shaping crypto sentiment. However, the latest market reactions indicate that geopolitical power shifts and trade rhetoric can now move Bitcoin and altcoin markets far more aggressively.
Trump’s ability to sway investor psychology—whether through tariffs, fiscal reforms, or global trade policies—has effectively redefined the crypto market’s sensitivity to U.S. politics.
As 2025 unfolds, traders may find themselves watching press conferences and presidential posts more closely than FOMC statements.
⚠️ Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always Do Your Own Research (DYOR) before making investment decisions.