“Don’t fight the Fed,” the market saying it warns investors of bets on the US Federal Reserve. For crypto traders, it may be the time for a new dict: “Don’t fight the president.”
On Monday, Trump Media and Technology Group, a social media company owned by President Donald Trump, revealed a $2 billion investment in Bitcoin
The announcement calls for traders to rethink the possibility of BTC’s remaining bids until the end of the year, potentially negating the traditional wisdom of the bloom market peaking one year after the half.
Half cycle
Bitcoin blockchain rewards half every four years, reducing the amount of BTC paid to miners per block by 50%. The fourth half, which was implemented last April, reduced the reward to 3.125 BTC. Since then, BTC prices have skyrocketed from around $65,000 to nearly $120,000.
The Bull Market is full-fledged, but there is a catch here. Since its inception, Bitcoin prices have tended to follow a predictable rhythm. In particular, prices tend to skyrocket after half of the event, peaking 12-18 months after the event, then slip into the bear market for the next year. Past bull runs peaked in December 2013, December 2017 and November 2021.
In other words, if history is the guide, BTC’s ongoing bull run has lost momentum before the end of the year, paving the way for the long-term bear market.
This may be different
The notion that history must repeat itself in the Bitcoin cycle requires a reevaluation this time for the important differentiator: the existence of a custody president.
On the one hand, Trump-linked DJTs are actively purchasing coins and putting bullish pressure on the market. Meanwhile, the Trump administration has added bull market sentiment through favourable regulatory reforms such as the recent Genius Stabrecoin Act.
Beyond traditional market cycles, Trump Media’s multi-billion dollar Bitcoin BET signal makes potentially important bullish macro tailbone potentially important. As the pseudonym observer’s endgame macro highlighted in X, “No one will spend $2 billion on supervolatile assets unless they bet on changes in the overall liquidity regime.”
Given President Donald Trump’s repeated public criticism of Fed Chairman Jerome Powell and high interest rates, the famous Bitcoin acquisition by the president-linked group suggests a clear strategic play: bets on future interest rate cuts and potential cuts in the US dollar.
Trump has repeatedly criticised the Fed and its chairman Jerome Powell for raising interest rates by 4.25%, saying Americans are costing billions of dollars.
“If the Fed doesn’t believe it will pivot by forced or design, this is reckless. If the Fed holds a higher rate for longer and Bitcoin fixes 40-60% with a flash of deflation, Trump’s media will risk losing or even liquidating the market from large markets depending on how this position is structured.
The reduction in the Fed rate and the potential collapse of the dollar have been able to increase system liquidity and ease the financial situation of ongoing risk-taking in both traditional and crypto markets.
Goldman is hoping to cut interest rates three times this year
According to Investinglive, strategists at investment banking giant Goldman Sachs hope to offer a three-quarter base rate reduction starting at its September meeting.
The expected mitigation cycle is conditional on inflation to reignite, Goldman noted, adding that the current trend points to gradual but stable policy cuts.
Read more: Trump Media discloses $20 billion Bitcoin Stack
