Trump 2.0 Full Moon: The Market Stages "A Song of Ice and Fire"

In January and February 2025, as Trump 2.0 completes its first month in office, policy dividends and market turbulence intertwine. On one hand, the new government's policies bring a warm current; on the other hand, technological breakthroughs in the AI field trigger fluctuations in the financial markets. February is particularly turbulent, with the interplay of economic data, regulatory adjustments, and technological changes, leading the cryptocurrency market through a round of baptism and reconstruction.

In February 2025, the economic situation in the United States underwent multiple changes. Key economic indicators declined, and the import tariff policy implemented by the Trump administration interacted with these factors, having a profound impact on both the U.S. and global economies, leading to fluctuations in global markets.

Despite the revised GDP growth rate of 2.3% for the fourth quarter in the U.S., several indicators show a slowdown in economic growth. Non-farm employment increased by 187,000 in February, below expectations; hourly wage growth fell to 0.2%, hitting a recent low. The consumer confidence index has declined for three consecutive months to 98.3, reflecting concerns among residents about decreasing purchasing power.

In January, the core CPI rose by 2.5% year-on-year, slightly down from the previous month. The annual rate of the core PCE price index in January was 2.6%, hitting a recent low. However, tariff policies have become the biggest variable for inflation. The new government has imposed a 10% tariff on imported goods from Mexico and Canada, which could raise the CPI by 0.3-0.5 percentage points.

In terms of interest rates, the market expects the Federal Reserve to keep the current rates unchanged in the short term. However, considering the uncertainty of inflation and the potential pressure from tariff policies, the decision to cut rates remains uncertain.

In 2025, the U.S. economy faces the contradiction of "slowing growth" and "inflation resilience." The Federal Reserve is attempting to balance risks through cautious policies, while the new government's tariff policies complicate the issue, affecting global supply chain pricing and exacerbating economic turmoil. Seeking certainty in the policy game will be the core proposition for global markets in the next six months.

In the field of AI, the emergence of DeepSeek has shattered market expectations for the future of AI. Its open-source model significantly reduces computing power requirements through algorithm optimization, driving the industry from a "computing power race" to a focus on "algorithm efficiency," reshaping the demand logic for AI infrastructure. This change, coupled with supply chain concerns triggered by tariff policies, has led to significant losses in tech stocks. In February, the Nasdaq dropped 4%, marking its worst monthly performance in recent times; the Dow fell by 1.58%, and the S&P 500 declined by 1.42%.

The market is reassessing the competitive landscape of the US AI industry, which is reflected in the performance of large tech companies in the US stock market. Even with impressive results like those of Nvidia, it faced sell-offs due to not significantly exceeding expectations. Overall market sentiment is bleak, and fear is spreading.

Cryptographic assets have not been spared either. The correlation between Bitcoin and Nasdaq has risen to 0.5, reaching a recent high. Market volatility has intensified, with investors' risk appetite declining, leading to a withdrawal from risk assets and putting pressure on the crypto market.

The new government's cryptocurrency policy has shifted from promises to actual actions. Trump issued the official Meme token $TRUMP, causing market fluctuations. This event demonstrates the potential of crypto assets as a new type of political tool, highlighting the idea that "code is power."

The government has also introduced a series of favorable policies, such as forming a cryptocurrency working group and exploring national cryptocurrency reserves. However, influenced by multiple factors, the cryptocurrency market experienced severe adjustments in February, with Bitcoin falling below $100,000 and closing at $85,000, representing a monthly decline of 17.39%. This drop is both a chain reaction of risk asset sell-offs and a reflection of the market's self-adjustment after excessive leverage.

It is worth noting that Bitcoin has shown a certain degree of resilience amid fluctuations. Some institutions view this volatility as a long-term allocation opportunity, such as a company investing 1.99 billion USD to purchase Bitcoin.

In the long term, the price trends of gold and Bitcoin are increasingly converging, reflecting the enhanced "digital gold" attribute of Bitcoin. Both are seen as alternatives to fiat currencies and may continue to maintain a certain degree of correlation in the future.

The current cryptocurrency market is in a vacuum of news, with the traditional narrative effect diminishing. However, three major trends are reshaping the market: a transformation in regulatory paradigms, a shift from speculation-driven to technology-driven markets, and the integration of AI with cryptocurrency. These changes may bring new breakthroughs to the market.

As Trump completes his first month in office, the market enters a complex period of chaos. Despite frequent short-term fluctuations, the scarcity of Bitcoin remains unchanged, giving it the vitality to traverse cycles. As stated in "A Song of Ice and Fire": "Chaos isn't a pit, chaos is a ladder." In this time of uncertainty, new opportunities may be emerging.