With inflation concerns and rising bond yields, analysts warn of significant volatility in cryptocurrency markets surrounding Trump’s inauguration despite his potential cryptocurrency-friendly policies.
Donald Trump’s inauguration is less than a week away, and analysts are now bracing for “heightened volatility” in cryptocurrency markets. Singapore-based QCP Capital suggested in a recent report that, as in 2017, President Trump’s actions are already shaking up global markets even before January 20, his official inauguration day.
Inflation remains a major concern for the U.S. economy. Job growth exceeded expectations, with non-farm payrolls rising to +256,000 compared to +165,000 expected, but inflation remains a concern. “Although CPI appears to have eased above the 2% target, market participants are still expecting December CPI to be higher than previous readings,” the analysts warn.
Additionally, President Trump’s planned tariffs on China, which are adding to inflation concerns, may not be implemented immediately but rather gradually. QCP noted that with bond yields rising, the market is currently pricing in just two rate cuts in 2025 and 2026.
“We expect volatility to increase before and after the inauguration as markets digest and adapt to a new term under President Trump.”
QCP Capital
Despite the uncertainty, there is hope for cryptocurrency investors. QCP points out that the Trump administration has cryptocurrency-friendly officials and that “rumors that Trump will enact broad, cryptocurrency-friendly executive orders could create a near-term tailwind, potentially supporting prices.”
But analysts are cautious. Bitcoin (BTC)’s $90,000 level has been tested multiple times, and with bond yields rising globally, the coming weeks could see chaotic and unpredictable market movements.