Stocks and Bitcoin are unimpressed by Trump 2

Unless you’ve been investing in European defense stocks since the beginning of the year (Germany’s Rheinmetall, France’s Thales and Britain’s BAE Systems are having a stellar year), you’re likely to have a bad year with your stock market or crypto portfolio. While January looked promising, February turned out to be nervous, and March has been bad so far. Bitcoin, like the S&P 500, is undergoing a correction. That’s remarkable, because investors had high expectations for Trump 2. So far, the Republican President hasn’t made stock and crypto investors very happy.

10%

The S&P 500 officially entered correction mode last Thursday, after suffering a 10% drop since its February 19 peak. For Bitcoin, a 10% drop is something that happens almost every week, however the largest digital currency had been falling almost weekly in that same period, trading down about 30% since its mid-December peak (a fairly typical correction during a crypto bull run, but one that was not expected ever since Donald Trump took office).

The market turbulence, both in stock markets and in the crypto market (the latter of which has seen increased volatility since the Bybit hack) over the past few weeks is a reflection of the uncertainty surrounding the new US President’s policies and their potential effects on the global economy. Investors fear that the uncertainty will make consumers reluctant to spend money and make businesses reluctant invest, almost automatically pushing the US (and probably European) economy into a recession.

Trump repeatedly says he will impose tariffs on America’s largest trading partners, but then acts uncertainly about when to impose them – following it up with the announcement of new levies on some products and delaying others. If there’s one thing investors don’t like, it’s that level of uncertainty.

Bullrun

This is all the more remarkable because the election of Donald Trump in November last year was the signal to start a new Bitcoin bull run. The largest digital currency rose from a level of around $50,000 in early November 2024 to an all-time high of $109,000 in mid-December. Profit taking in the weeks that followed seemed normal as crypto investors were hoping for the announcement of a ‘strategic bitcoin reserve’ during Trump’s first week. That announcement has since come, but without a start date or other specific details.

The coming weeks will have to show whether this is the end of the bull run or just a short pause. Much will depend on economic data from the United States. If those figures also disappoint, investors will likely choose to play it safe.