Singapore based cryptocurrency investment firm QCP Capital announced today that it is less than a week before the inauguration of the 47th US President Trump. Similar to 2017, Trump had already found a way to shake the global market even before his official inauguration on January 20th. The concern of inflation continues to plague the US market. The US job market remains strong, with an unexpected increase in non farm payroll (NFP) last week (+256000, expected+165000). Although the Consumer Price Index (CPI) seems to be easing above the 2% target and the Producer Price Index (PPI) has also cooled down, market participants still expect December's CPI to be higher than before. Trump has vigorously promoted plans to impose tariffs on trading partners, further exacerbating concerns about inflation. Unlike the initial expectation of a comprehensive tariff increase, it now appears that the new government will gradually impose tariffs on some imported goods. Affected by the shadow of inflation, bond yields have once again begun to climb. At present, the market expects only two interest rate cuts in 2025 and 2026 (while the latest dot matrix of the Federal Reserve has predicted four interest rate cuts), and the yield of 10-year and 30-year US treasury bond bonds is approaching the level of 5%. With the rise of treasury bond bond yield, the stock market also suffered from panic, and the S&P 500 index once fell below the support level of 5800 points. Bitcoin also followed suit, briefly falling below the $90000 mark.
Given recent developments, the current macroeconomic environment seems unfavorable for risk assets. However, a positive factor is that Trump's actual policies often differ greatly from his public statements. The concern about inflation may not be as severe as the market expects. For cryptocurrencies, there are cryptocurrency friendly individuals in the Trump administration. There are rumors that Trump will issue a broad and cryptocurrency friendly executive order, which provides short-term positive support for cryptocurrency prices. It is expected that market volatility will intensify before and after Trump's inauguration, as the market needs to digest and adapt to Trump's new term. We maintain a cautious attitude towards the price of Bitcoin at $90000, as this price has been tested multiple times. The stock market also appears fragile, coupled with the rise in global bond yields, which may lead to market chaos and increased volatility.
