Trump's return: How to find investment opportunities amid policy turmoil

1. The impact of Trump’s new term on the crypto market: the game between policy and economy

With Trump returning to lead the United States, changes in the crypto market and related policies in 2025 have become the focus of investors. During his first term, Trump promoted the prosperity of the U.S. stock market, gold market and crypto assets through tax cuts, deregulation, trade wars and monetary policies. Now, as the new term approaches, Trump's policies, the power structure of Congress and changes in the global economic environment will have a profound impact on the crypto market, and investors' anxiety and uncertainty will increase.

Policy changes in the crypto market: from suspicion to support

During Trump's first term, the US government was relatively conservative in its attitude towards the crypto market, especially in the regulation of crypto assets such as Bitcoin. However, with the gradual acceptance of blockchain technology, Trump's policies began to shift toward supporting the crypto industry. It is expected that in his second term, Trump may encourage market liquidity and enhance investor confidence through tax cuts and crypto support policies, further supporting the rise of crypto assets.

Data related:

- Bitcoin has risen from approximately $1,000 when Trump took office in 2017 to nearly $60,000 in 2021. It is expected that support from Trump’s policies will further drive Bitcoin’s rise.

- According to the CoinShares 2024 report, the U.S. market's interest in crypto assets has been increasing year by year and is expected to continue to grow in 2025, especially driven by institutional investors.

The power structure of the Senate and the House of Representatives and the game of the crypto market

Trump's new term will face political pressure from Congress, especially the Democratic-controlled House of Representatives. In the mid-term elections in November 2026, the Democrats may control the House of Representatives, which will restrict Trump's promotion of policies related to the crypto market, especially in the regulation of crypto assets. Based on past experience, mid-term elections are usually unfavorable to the ruling party, with the president's party losing an average of more than 20 seats in the House of Representatives and several seats in the Senate. However, Trump can still rely on the support of the Republican Party in the Senate to promote some policies, especially support for blockchain technology and crypto assets. It is expected that the election results after 2026 may have a significant impact on the Trump administration's policy implementation.

Key People:

- Elizabeth Warren (D): has long advocated for stronger regulation of crypto assets, particularly in the areas of anti-money laundering, tax compliance, and market transparency.

- Brad Sherman (D): Will align with Warren in pushing for stricter anti-money laundering and financial stability measures.

Despite pressure from Democratic figures, Trump’s support in the Senate will help advance policies in the crypto market.

2. Two relatively stable investment routes

Amid the current market uncertainty, investors can focus on the following two more stable investment routes: the AI ​​Agent track and the Trump concept token.

AI Agent Track: A Stable and Resilient Investment Direction

With the uncertainty in the market, the AI ​​Agent track has become a relatively safe investment direction. Several leading AI Agent projects have shown strong rebound capabilities during the correction. For example, Virtuals Protocol has driven its market value back to $2.1 billion through technological updates and new collaborations, and other projects such as AIXBT and Griffain have also performed well, driving prices up.

- The rebound and resilience of the AI ​​Agent track

Despite the risk of a correction in the overall crypto market, the AI ​​Agent track has become one of the best performing sectors. After experiencing a correction, many leading projects have shown strong recovery, with the rebound reaching up to 130%. For example, after a sharp correction, Virtuals Protocol updated its mechanism to increase its market value to $2.1 billion, which boosted market confidence and drove prices up.

- Technological breakthroughs and ecological development in the AI ​​Agent track

The progress of AI Agent projects in technology and ecology is one of the important reasons why it attracts investors. Virtuals Protocol has recently further strengthened its ecosystem construction through cooperation with well-known brands such as Animoca Brands and Illuvium. Through collaboration with agent partners, the project has promoted the incentive mechanism of the platform and ecosystem, further providing a solid foundation for ecological expansion.

- The difference between the independent trend of AI Agent and traditional projects

Compared with traditional crypto projects, AI Agent has demonstrated more innovative capabilities in operational governance, decentralized asset issuance, and technology applications. Thanks to these innovations, the AI ​​Agent track has attracted more investors with high risk preferences.

Trump Token: Investment Opportunities and Market Momentum

As Trump gradually supports cryptocurrencies, multiple crypto projects related to him have begun to emerge, the most notable of which is the WLFI (World Liberty Financial) token. Although the terms and utility of WLFI's tokens are not ideal, its deep relationship with Trump and the brand effect of the Trump family may provide WLFI with additional market momentum.

On the other hand, despite the uncertainty of WLFI's performance, more investors may pay attention to the cooperation projects chosen by Trump. These projects are backed by Trump's concept and also have strong fundamentals. For example, projects such as Ethereum (ETH), Aave (AAVE), and Chainlink (LINK) have shown strong market potential through cooperation with Trump. In particular, World Liberty's cooperation with platforms such as Ethereum and Scroll may bring more on-chain data and cross-chain connection applications, which provides strong support for the rise of related tokens.

In addition, the market is also paying more attention to the concept of RWA (Real World Assets). As a leading project in the RWA track, Ondo Finance has achieved significant growth in recent times. Trump's policies may accelerate the maturity of the RWA concept, promote the combination of more physical assets and digital assets, and bring new investment opportunities to the market.

3. Trading indicators - focus on the impact of the economy ( CPI inflation) on the Fed's decision

The Federal Reserve's economic judgments, such as its assessment of employment and inflation levels, may be interfered with by principal component factors, especially in the context of the current rapid changes in economic structure.

The impact of employment changes in the technology and AI industries on economic indicators

With the booming technology industry, especially the rapid rise of AI, the demand for high-skilled labor has surged. At the same time, the demand for human resources in traditional industries has slowed down, and even layoffs have occurred. This structural difference may lead to distortion of overall employment data. For example, the reduction of jobs in traditional industries may be masked by high-paying jobs in emerging technology industries, resulting in the overall unemployment rate data appearing to be good.

Interference factors in the Fed’s economic judgment

- Data lags and revisions: The lags and late revisions of macroeconomic data may cause the Fed's judgment based on lagged data to deviate from the actual economic situation.

- Limitations of a single indicator: The Fed’s over-reliance on certain single economic indicators (such as core PCE inflation) may lead to one-sided judgments.

- Geopolitics and unexpected events: Geopolitics and unexpected events (such as natural disasters) can affect the economy. These factors are often difficult to predict, bringing uncertainty to the Fed’s judgment.

Investors’ response strategies

Considering that the Fed's judgment may be affected by many factors, investors can adopt the following strategies:

- Pay attention to broader data: pay attention to detailed industry data, consumer confidence, corporate profits, etc.

- Emphasis on micro-level analysis: Comprehensive understanding of economic and market conditions through industry and company analysis.

- Maintain independent thinking: Do not blindly rely on the judgment of the Federal Reserve, and make decisions based on your own research.

- Do a good job of risk management: The crypto market is volatile, so do a good job of position management to avoid over-investment.

4. Pay attention to the Bank of Japan's interest rate hike

The policy moves of the Bank of Japan have a significant impact on global markets. According to the latest data, the market's expectation of a rate hike by the Bank of Japan at its January 23-24 meeting is close to 99%. Bank of Japan Governor Kazuo Ueda said that as confidence in wage growth increases, a rate hike is highly likely.

The impact of interest rate hikes on global markets

Japan's interest rate hikes could lead to an appreciation of the yen, which in turn could affect global capital flows. Funds could flow out of high-risk assets (such as cryptocurrencies) and shift to more stable asset classes. In addition, interest rate hikes could lead to adjustments in carry trade strategies among Japanese investors, affecting liquidity and risk appetite in global markets.

summary

Trump's return brings huge uncertainty and potential to the market, especially under the multi-faceted changes in policies, politics and economy. His policies are expected to drive up inflation, which will in turn affect US bond yields and gold prices, while exacerbating global trade tensions, which may trigger stock market volatility. However, crypto assets may benefit from policy clarification and increased institutional participation. Investors should pay attention to investment opportunities such as AI Agent track and Trump concept tokens, and flexibly adjust strategies to cope with the risks and opportunities brought about by policy changes, and seize short-term volatility and long-term growth potential.