Trump Media’s BTC purchase likely signals impending macroeconomic tailwinds.
“Don’t fight the Fed,” a market adage states, warning investors from betting against the U.S. Federal Reserve. For crypto traders, a new dictum may be needed: “Don’t fight the President.”
On Monday, Trump Media and Technology Group, the social media company owned by President Donald Trump, disclosed a $2 billion investment in Bitcoin ($117,590.69), with the intention of acquiring more.
The announcement calls on traders to reconsider the possibility of BTC remaining bid through the year-end, potentially invalidating the conventional wisdom that the bull market peaks a year after the halving.
The Halving Cycle
The Bitcoin blockchain implements reward halving every four years, reducing the amount of BTC paid to miners per block by 50%. The fourth halving, implemented in April last year, decreased rewards to 3.125 BTC. Since then, BTC’s price has surged from roughly $65,000 to nearly $120,000.
The bull market is in full swing, but here is the catch.Since its inception, Bitcoin’s price has followed a predictable rhythm – a four-year cycle centered around halving. Notably, prices tend to surge after halving, peaking 12-18 months after the event and then slipping into a year-long bear market. Past bull runs peaked in December 2013, December 2017, and November 2021.
In other words, if history is a guide, BTC’s ongoing bull run could lose momentum before the year’s end, paving the way for a prolonged bear market.
This Time Is Different
The notion that history must repeat itself in Bitcoin’s cycles requires reassessment this time due to a key differentiator – the presence of a pro-crypto president.
On one hand, the Trump-linked DJT actively purchases coins, adding bullish pressure to the market. On the other hand, the Trump administration adds to bullish market sentiment through favorable regulatory reforms, such as the recent GENIUS Stablecoin Act.
Beyond traditional market cycles, Trump Media’s multi-billion-dollar Bitcoin bet signals potentially significant bullish macro tailwinds. As pseudonymous observer EndGame Macro highlighted on X, “No one spends $2 billion on an ultra-volatile asset unless they’re betting on a shift in the entire liquidity regime.”
Given President Donald Trump’s repeated public criticisms of Fed Chairman Jerome Powell and high interest rates, this high-profile Bitcoin acquisition by the President-linked group likely suggests a clear strategic play: a bet on forthcoming rate cuts and a potential debasement of the U.S. dollar.
Trump has repeatedly criticized the Fed and its Chairman Jerome Powell for keeping interest rates elevated at 4.25%, stating it costs Americans billions of dollars.
If they didn’t believe the Fed was going to pivot, either by force or design, then this would be reckless. Because if the Fed holds rates higher for longer and bitcoin corrects 40–60% in a deflationary flush, Trump Media would risk massive mark-to-market losses or even liquidation depending on how this position is structured,
EndGame Macro noted
Fed rate cuts and potential debasement of the dollar could only add liquidity to the system, easing financial conditions for continued risk-taking in both traditional and crypto markets.
Goldman Sachs Projects Three Rate Cuts This Year
Strategists at investment banking giant Goldman Sachs expect three-quarter basis-point rate cuts, starting from the September meeting, according to InvestingLive.
The expected easing cycle is contingent on inflation not flaring up again, Goldman noted, adding that the current trends point to a gradual but steady policy pivot to rate cuts.
