Will Trump's “short -term pain” plan lead to long -term profits for crypto?

High-risk assets such as tech shares and crypto have sold in the past few months or as strongly when Donald has escalated Trump's trade war.

However, this could be all part of a “short -term pain champion plan” that aims to reduce the inflation and refinancing of US dollar of US dollar by allowing the market weakness, the Koobeissi letter reported.

“We have seen over 5 trillion dollars of US shares with the aim of reducing interest rates. Will it work? “

Planned market turbulence

The administration seems to be agreed in this approach, and the Minister of Commerce Howard Lutnick said: “Stock market that does not drive the results for this administrator,” Finance Minister Scott Bessent that he is “not concerned about a small volatility” and Trump recognizes a “transition phase” that “takes a little time”.

Elon Musk also seems to support this strategy and says that Tesla share, despite TSLA tanks, “will be fine in the long term since the beginning of this year”.

It is very clear what happens:

President Trump now believes that “short -term pain” is his only option to reduce inflation and refinance of 9 US dollars from US debts.

We have seen over 5 trillion US dollars, which were deleted by US shares with the aim of reducing interest rates.

Will it work?

(a thread) pic.twitter.com/qlqyu65zatz

– The Koobeissi letter (@kobeisiletter) March 13, 2025

This intentional tariff from markets can be driven by several factors, such as: B. a record deficit of 1.15 trillion US dollars in February, the desire for oil prices, plans to reduce the US trade deficit through tariffs, and the goal of reducing state jobs that make up the latest employment growth.

Trump's economic weakness plans seem to have several goals, including reducing inflation (currently 2.8%), oil prices and interest rates. It also aims to reduce the deficit editions, trade deficits and the inefficiency of the government.

The economist Joe Foudy said to Newsweek that this was a “political recognition” before adding:

“If the stock market reacts negatively or when we see weaker economic data, Trump must be ahead of the narrative. By framing short -term economic swings as necessary for long -term profits, he manages expectations. “

“Usually the Federal Reserve would reduce interest rates to stabilize the economy. However, if the tariffs increase the prices, political decision -makers can hesitate to fear that interest cuts could refuel inflation, ”commented the NYU economic professor Lawrence White.

Trump clearly tells his plans.

He does not take care of the stock market or the cryptom market.

All he takes care of it is that interest rates are falling, which definitely causes short -term pain.

This reminds me of Q4 2021 when Powell higher prices and … pic.twitter.com/b6srvnwrf8

– Cas Abbé (@cas_abbe) March 13, 2025

Effects on cryptoma markets

This “short -term pain” approach could lead to a significant market volatility in all investment classes, including cryptocurrencies. Since swings occur in the traditional markets, investors can reduce the commitment with high risk assets such as crypto in order to cover losses elsewhere or change in cash positions. When the interest rates rise again.

Market instability could also lead to liquidity problems in cryptoma markets, which may cause exaggerated price movements. Crypto could follow the stock market trends after the stock market trends at short notice. The market has already declined by around 25% in recent months because 1 Billion US dollar has left the room.

In the long term, the reduction in interest rates could ultimately benefit as an alternative investment if cheap money is looking for returns.

In addition, economic instability could accelerate the efforts to regulate crypta, that enable clarity and could possibly attract more institutional adoption.

If the strategy affects the dollar strength that has recently weakened, cryptocurrencies could benefit as alternatives to Fiat currencies.

Over time, cryptoma markets could gradually disconnect from traditional markets when the sector matures and sets its own economic cycles. However, there is probably more pain in front of any win.