Market Update 2025
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Introduction
The change in numbers is all that anyone can talk about this new year! From the change 2024 to 2025, to the change in stock index, and from the change in Gold rates per ounce to the value of 1 bitcoin against the dollar. It has been less than 40 days since the start of the year and already we have seen major surges and declines in various markets. With various factors linked to how the economics of the world is welcoming the new year, one major factor is the new implementations that POTUS has been signing left and right ever since he set foot in the oval office.
Donald Trump as the President of the United States
The newly re-elected president has been busy the first two weeks back in the office. With major changes to health, aid, and trade policies, that impact not only foreign relations with neighbouring countries, like Canada and Mexico, but also look to put into review major aid programs with UNHRC and USAID. Here are a few major actions by Donald Trump in the office that have had a direct or indirect effect on global commerce.?
While these tariffs have not yet been put into effect despite the signing of a directive, they have opened the channels of communication between the whitehouse and representatives of the concerned government. However, the news of these changes have created a widespread chaos in the crypto space, the stock exchange and gold rates.?
What initiated the tariffs on Canada, Mexico and China??
The Trump administration has been fighting a war against illegal aliens and drugs since its last administration. With the increase in illegal border crossing of immigrants, drugs and contraband, the administration has established a national emergency allowing for such actions to be taken by a sitting president under the International Emergency Economic Powers Act.?
Fentanyl is one of the major drugs that the government is trying to stop being smuggled into the country. However, due to past failed attempts, the government has decided to take stern decisions in implementing these restrictions. Luckily as of February 3rd, 2025, the Trump Administration has halted its decision to impose tariffs after governments of Canada, Mexico and China established dialogue to discuss stricter border controls.?
How did the market react with the imposed tariffs??
Markets around the world saw major falls in their indexes. It is theorized that the major reason for this was due to an intensified fear amongst the traders and investors. The global dynamics saw a potential for a trade war to be initiated between the United States and the rest of the world. These fears were the major reasons for major sell offs, and purchases in various sectors.? Here are how the major money markets and assets reacted to the directives passed in the oval offices.?
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Stock Markets
The markets saw a major downtrend with almost a freefall for many stocks and companies. This resulted in major sell offs, and the USD strengthening as investors stabilized in uncertain times. Here are a few downtrends after the decision was signed.?
Cryptocurrency
The crypto space saw a rapid decline as Bitcoin took a steep fall of 10%, and most currencies followed. Currencies like XRP saw a sharp decline from $3.15 to $2.2. Bitcoin found itself looking for support at the $90,000 mark, while multiple exchanges like Binance saw massive long position liquidations that overall summed to $1.87 billion.?
Gold
Despite taking an initial dip, Gold continued its rally to increase in value. Taiwan and Azerbaijan increased their Gold reserves in the last couple of days. The stability and minor increase in Gold can be seen as a step by various governments to de-dollarize their economy with the decisions made by the government. One such government is China, which had previously stopped its purchase of Gold for the last six months, but has continued to expand its reserve in the last couple of weeks.?
While the passing of these directives provided a major fall, the markets were quick to recover as the tariffs were halted once dialogues between the governments were established. One can say that the damage was done, and now the world waits to see how the market will react to the decisions of said dialogues, or any other decisions made by the Trump Administration.?
Conclusion
The opening of U.S. markets today carries significant implications, potentially setting the trajectory for the remainder of the month. Given the strong correlation between cryptocurrencies and technology stocks, movements in the equity markets will be a critical indicator for digital asset performance. A rally in Nasdaq could provide upward momentum for Bitcoin and Ethereum, while a downturn may signal increased volatility. Additionally, forthcoming policy announcements from U.S. regulators could further influence market sentiment, particularly in areas related to crypto oversight and broader financial regulations. As these factors converge, today’s market activity will offer valuable insights into the near-term economic and investment landscape.