QCP Capital: It is expected that the volatility of the cryptocurrency market will intensify around the time of Trump's inauguration

PANews reported on January 15 that Singaporean cryptocurrency investment firm QCP Capital stated today that it is less than a week until the inauguration of the 47th President of the United States, Donald Trump. Similar to 2017, Trump has already found ways to shake up global markets even before his official inauguration on January 20. Concerns about inflation continue to plague the US market. The US job market remains strong, with last week's non-farm payroll (NFP) unexpectedly increasing (+256k, expected +165k). Although the Consumer Price Index (CPI) seems to be easing above its target of 2%, and Producer Price Index (PPI) has cooled down somewhat, market participants still expect December's CPI will be higher than previous values.

Trump has been heavily promoting plans for tariffs on trade partners which further exacerbates concerns about inflation. Contrary to initial expectations of comprehensive tariffs, it now appears that the new government will gradually impose tariffs on certain imported goods. Shadowed by fears of inflation, bond yields have begun climbing again. The market currently expects only two rate cuts in 2025 and 2026 (while Fed’s latest dot plot had predicted four), and both ten-year and thirty-year U.S Treasury bond yields are nearing levels around five percent. As treasury yields rise, stock markets also face panic; S&P500 index once fell below support level at 5800 points while Bitcoin briefly dropped below $90K.

Given recent developments, current macroeconomic environment does not seem favorable for risk assets. However one positive factor is that Trump's actual policies often differ greatly from his public statements; worries over inflation may not be as severe as anticipated by markets . For cryptocurrencies there are crypto-friendly personnel within Trump administration; rumors suggest Trump will issue broad executive orders friendly towards cryptocurrencies providing short-term bullish support for their prices . Market volatility is expected around time of Trump’s inauguration as markets need to digest and adapt to Trump's new term. We remain cautious about Bitcoin’s $90K price level as it has been tested multiple times; stock market also appears fragile, coupled with rising global bond yields this could lead to increased market chaos and volatility.