Analysts warn crypto investors should expect ‘heightened volatility’ before and after Trump’s inauguration

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Analysts are cautioning about substantial volatility in the cryptocurrency market during President Trump’s inauguration, even as there may be favorable crypto policies expected, due to growing worries over inflation and increasing bond yields.

In just a few days, Donald Trump will be inaugurated, and experts are preparing for increased turbulence in the cryptocurrency market. Much like in 2017, it seems that even before taking office on January 20th, Trump’s actions are causing ripples throughout global markets, according to QCP Capital’s latest analysis.

Despite robust job creation (with an addition of 256,000 non-farm jobs as opposed to the projected 165,000), inflation continues to be a significant issue for the U.S. economy. Economists caution that the Consumer Price Index (CPI) might increase more than the previous reading in December, even though it seems to have slightly eased beyond the 2% target currently.

Moreover, the proposed tariffs by Trump on China are contributing to concerns about inflation, even though they might be implemented progressively rather than all at once. It’s worth noting that markets currently expect only two interest rate reductions in 2025 and 2026, as bond yields increase, according to QCP.

There may be increased market uncertainty and fluctuations both before and following the inauguration, as investors work to understand and adapt to a new administration led by President Trump.

QCP Capital

Regardless of the ongoing uncertainties, there’s a glimmer of optimism for cryptocurrency investors. QCP highlights that Trump’s administration is known to be favorable towards cryptocurrencies, and whispers of Trump introducing extensive, crypto-friendly executive orders could temporarily boost the market momentum, possibly lifting prices.

Nonetheless, analysts remain wary. The $90,000 mark for Bitcoin (BTC) has been challenged repeatedly, and given the surge in bond yields worldwide, the upcoming weeks might present chaotic and uncertain market fluctuations.

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2025-01-15 14:28