Crypto Market Reacts Under Donald Trump’s and Elon Musk’s Recent Statements
The recent statements made by the newly-elect US President Donald Trump and tech billionaire Elon Musk have shaken global markets, including the cryptocurrency one, sending shockwaves and causing a massive volatility surge.
While Trump has been making territorial claims (Canada, Greenland and the Panama Canal), just verbal so far and Elon Musk has been attacking European governments, showing clear support for far-right political forces in Germany, the world’s pioneer cryptocurrency Bitcoin has plummeted, pulling altcoins along. This week, Bitcoin saw a more than 10% drop, losing the $102,000 mark and landing at $91,835. By now, BTC has recovered the $95,000 range where it has been moving in since Friday.
Trump’s US Territorial Expansion Statements
Shortly after winning the US presidential election in early November, Donald Trump began to actively suggest that Canada join the US as the 51st state to improve its security and economy (and threatening to implement high trade tariffs on Canadian goods otherwise). He also stated that the US must regain control over Greenland owned by Denmark, as well as control the Panama Canal once again in order to have the tariffs reduced, since Trumps believe they are currently too high). These public statements made by Trump have reignited geopolitical tensions and are sending ripples across financial markets.
Cryptocurrencies, which are frequently referred to as a hedge against political and economic instability, first witnessed a surge in trading volume and enjoyed impressive price spikes as traders turned to them for refuge from falling conventional markets, have begun to tumble and then crash due to Trump’s territorial and political remarks.
Initially, Bitcoin saw a large rally since traders anticipated increased demand for this largest decentralized cryptocurrency to hedge against the rapidly rising geopolitical uncertainty. However, after investors began to realize the possible long-term outcome of such statements, Bitcoin and altcoins suddenly faced sharp corrections.
It is likely that the prospect of tightened international relations and disruptions in trade between countries (Canada considers to raise tariffs on US goods as well in response), especially considering Canada and the European Union (taking into account Trump’s mentions of Greenland) could have a domino effect on market liquidity globally and have a negative impact on crypto adoption and investment around the world.
What is more, the idea of the US recapturing control over the Panama Canal seems to have brought back echoes of US’s colonial and imperial ambitions that were gone in the past. Latin American countries, and Panama among them, are already looking at blockchain as a basis for financial independence and Trump’s ambitions regarding the Panama Canal may accelerate their decoupling from the financial influence of the US dollar.
Attempts to reclaim the Canal by the US could even bolster local interest in regional digital currencies. Besides, such a move would also make the overall environment for global crypto markets quite unpredictable.
Elon Musk Supporting the German Far-Right and Attacking UK Immigration Policies
Next after Trump comes tech mogul Elon Musk who has been openly criticizing the German government and their immigration policies. The Tesla CEO and also the boss of the newly formed US Department of Government Efficiency has been showing clear support for the far-right AfD (“Alternative for Germany”) party, which has sent European markets into uncertainty, particularly regarding crypto. Musk has stated that only the AfD can save Germany.
Musk’s public statements in the past have shown massive price swings for Bitcoin and Dogecoin in particular. Musk’s attacks on the German government may have a backlash against Tesla and Musk’s other ventures which could create a ripple effect on the European markets, reducing liquidity in the crypto space.
The Tesla CEO and Trump’s close ally Musk has also been criticizing British immigration policies and particular their failures in the case of mass rapes of young girls made by Pakistani gangs. Musk strongly criticized the incidents where the fathers of the victims were taken in custody for taking action against the criminals more than a decade ago. He called for the UK prime minister Keir Starmer to resign over his failure to do the justice when he was the country’s leading prosecutor at the time when the gloomy events took place.
Crypto Markets Shift from Euphoria to Volatility
As was stated above, the cryptocurrency market, which is known for its speculative nature and high sensitivity to external, both political and economic developments and events, has reacted by suddenly losing the initial euphoria experienced after Trump’s victory over Harris and now faces a hard volatility rise.
Trump’s recent statements, which are potentially able to disrupt geopolitical and economic stability, have made traders reevaluate the risks associated with profile cryptos – Bitcoin, Ethereum, etc. Their prices have seen large drops as investors have been trying to navigate the rapidly rising uncertainty.
Both Trump and Musk’s strong remarks have led to profit-taking and panic selling of Bitcoin and other cryptocurrencies which investors happily bought in November and December. Their statements have created an environment where crypto prices may see wild swings in response to even slightest news. Investors now remain vigil and alert, reacting to any new developments and watching the two aforementioned big figures in the political and financial worlds very attentively.
