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Crypto Faces Uncertainty As Trump’s ‘Short-Term Pain’ Unfolds

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US President Trump’s outspoken acceptance of near-term economic hardship has placed risk assets—including Bitcoin (BTC) and the broader crypto market—under mounting pressure. According to a thread by The Kobeissi Letter on X, President Trump’s strategy revolves around tolerating significant “short term pain” in order to drive down inflation and facilitate the refinancing of over $9 trillion in US debt.

Will Crypto Survive Trump’s ‘Short-Term Pain’ Strategy?

The impact on cryptocurrencies has been immediate and pronounced. While US equities have shed an estimated $5 trillion in market value this year, digital assets have also suffered steep losses. Since President Trump’s inauguration on January 21, Bitcoin (BTC) has declined by approximately -23%, Ethereum (ETH) has tumbled by roughly -43% and the broader crypto market has experienced even more dramatic price drops.

Although high volatility is nothing new in crypto, the synchronized downturn suggests that crypto assets are not immune to macroeconomic forces. The Kobeissi Letter adds, “Based on our research, President Trump made this conclusion BEFORE inauguration. However, he began formally articulating it on March 6th. Below is the headline that destroyed investor confidence in 2025. President Trump is no longer the ‘stock market’s President’ (for now).”

The Kobeissi Letter points to March 9 as the date President Trump further confirmed his stance by noting that America is in a “period of transition” and that it will “take a little time,” implying a willingness to tolerate near-term market turbulence. During this period, Commerce Secretary Lutnick’s statement on March 6—“Stock market not driving outcomes for this admin”—was followed by Treasury Secretary Bessent’s remark, “Not concerned about a little volatility.”

Although The Kobeissi Letter’s analysis notes that the administration’s viewpoint solidified before inauguration, it cites President Trump’s urgent focus on the year 2025, when $9.2 trillion in US debt will either mature or need to be refinanced. The thread states, “First, as we have previously noted, the US is facing a massive refinancing task. In 2025, $9.2 TRILLION of US debt will either mature or need to be refinanced. The quickest way to LOWER rates ahead of this colossal refinancing would be a recession.”

Beyond debt concerns, The Kobeissi Letter also highlights the administration’s drive to reduce oil prices and the US trade deficit as part of the same economic calculation. Since President Trump took office, oil has fallen by over 20%. “Furthermore, a clearly defined part of President Trump’s strategy has been to LOWER oil prices. Oil prices are down 20%+ since Trump took office. This morning, Citigroup said oil prices falling to $53 would lower inflation to 2%. What would lower oil prices? A recession.”

Meanwhile, the administration’s extensive use of tariffs, which The Kobeissi Letter describes as “levying tariffs on almost ALL US trade partners,” is chipping away at GDP growth estimates, further hinting that a deliberate slowdown is in motion.

The Kobeissi Letter also notes, “On top of this, DOGE and Trump are attempting to cut TONS of government jobs. These are the same jobs that have accounted for much of the recent job ‘growth’ in the US. Government jobs have risen by 2 million over the last 4.5 years. Cutting these jobs will spur a recession.” DOGE leader Elon Musk appears resigned to short-term declines. Even after Tesla (TSLA) recorded its seventh-largest historical drop on March 10, Musk posted that “It will be fine long-term.”

For crypto traders and investors, the “short term pain” scenario by Trump is currently dictating the price action. The question, the analysts from The Kobeissi Letter posit, is whether this will lead to a more favorable economic landscape in the long run. “Is the ‘short term pain’ worth the ‘long term gain’ in President Trump’s economic strategy?”.

At press time, the BTC price remained under heavy downward pressure and traded at $82,000.

Bitcoin price
BTC stalls below key resistance, 1-day chart | Source: BTCUSDT on TradingView.com

Featured image from Shutterstock, chart from TradingView.com



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Bitcoin

U.S. government holds $16B in Bitcoin, eyes 1m BTC under new bill

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5 hours ago

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March 15, 2025

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As of March 12, the U.S. government controls 195,234 Bitcoin, valued at more than $16 billion, according to a new Nansen report.

The government’s crypto portfolio also includes $4.6 million worth of Ethereum (ETH), stablecoins such as USDC, and yield-bearing assets DAI and AUSDC_V2.

A newly proposed bill, introduced by Rep. Nick Begich, could dramatically increase the government’s holdings. The House Strategic Bitcoin Bill aims to acquire 1 million BTC, implying roughly 5% of Bitcoin’s total supply, over the next five years. If passed, the dollar value of the purchases at today’s market price would be just shy of $110 billion.

Implications for the Market

If the bill passes, the U.S. government’s Bitcoin holdings would surpass the estimated 1.1 million BTC attributed to Bitcoin’s mysterious creator, Satoshi Nakamoto. This would give the government significant influence over market liquidity and price stability, potentially driving up Bitcoin’s value and reshaping market dynamics.

However, this level of ownership raises concerns about the centralization of a traditionally decentralized asset. Large-scale acquisitions could make the government a price setter in the Bitcoin market which some argue stands against the original ethos of cryptocurrency.



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Kentucky Senate Passes Bill Protecting Bitcoin Self-Custody Rights

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11 hours ago

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March 14, 2025

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Yesterday evening, the Kentucky Senate unanimously passed a bill aimed at protecting Bitcoin self-custody rights and digital asset mining operations. With a decisive 37-0 vote, the legislation, titled AN ACT relating to blockchain digital assets (HB 701), now moves to the Governor’s desk for final approval.

Sponsored by Representatives Adam Bowling and T.J. Roberts, the bill affirms the right of individuals to self-custody digital assets through self-hosted wallets. Additionally, it prevents local zoning laws from discriminating against digital asset mining businesses, ensuring that Bitcoin miners can operate freely within the state.

The bill outlines several key provisions, including:

  • Protection for Bitcoin self-custody: Individuals have the legal right to use and store digital assets in self-hosted wallets.
  • Prohibition of discriminatory zoning laws: Local governments cannot impose zoning changes that unfairly target digital asset mining businesses.
  • Exemptions from money transmitter licensing: Home Bitcoin miners and digital asset mining businesses are exempt from Kentucky’s money transmitter requirements.
  • Clarification of securities laws: Digital asset mining and staking as a service are explicitly not classified as securities under Kentucky law.

After passing through the Kentucky House with a 91-0 vote on February 28, 2025, the bill moved swiftly through the Senate. The March 13 vote saw full bipartisan support, with 37 senators voting in favor, zero opposed, and one not voting.

The legislation now awaits the Governor’s signature, which would officially enshrine Bitcoin self-custody protections and digital asset mining rights into Kentucky law. If signed, Kentucky will become one of the more Bitcoin-friendly states in the country, setting a precedent for other states to follow.





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Why is Bitcoin price stuck?

Published

17 hours ago

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March 14, 2025

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Bitcoin (BTC) price has been consolidating within a roughly $5,500 range since March 9 as the $84,000 level represents stiff overhead resistance.

Data from Cointelegraph Markets Pro and Bitstamp shows BTC price oscillating between $78,599 and $84,000, as shown in the chart below.

BTC/USD daily chart. Source: Cointelegraph/TradingView

Key reasons why Bitcoin price remains flat today include:

  • Trump’s trade war tensions causing uncertainty in the market.

  • Weakening demand for Bitcoin and neutral funding rates.

  • BTC price remains pinned below the 200-day SMA.

Broader economic uncertainty, weakening demand

Bitcoin’s price stagnation is partially due to the broader economic and geopolitical factors that are currently at play. 

What to know:

  • Trump’s new policies, such as his proposed trade tariffs on Mexico and Canada, have unnerved the market.

  • Investors, wary of inflation concerns and a potential tariff war, are avoiding risk assets like Bitcoin.

  • As Cointelegraph recently reported, Bitcoin’s rally post-Trump’s November election has lost steam amid a weakening global economy. 

  • This has resulted in weaker demand for Bitcoin, according to Glassnode.

For instance, the cost basis of 1w–1m short-term holders flattened out above that of the longer-term holders (1m–3m) in Q1, “marking an early sign of weakening demand in the immediate term.”

Related: Bitcoin price drops 2% as falling inflation boosts US trade war fears

Bitcoin’s drop below the $95,000 level saw the 1w–1m cost basis slide below the 1m–3m cost basis, “confirming a transition into net capital outflows.”

Glassnode noted:

“This reversal indicates that macro uncertainty has spooked demand, reducing new inflows… and suggests that new buyers are now hesitant to absorb sell-side pressure, reinforcing the shift from post-ATH euphoria into a more cautious market environment.”

Bitcoin STH capital flow. Source: Glassnode

Until the current trend changes due to macroeconomic tailwinds, such as Fed rate cuts, Bitcoin could struggle to break out of the current range, leaving it vulnerable to pullbacks toward $70,000.

Another clear signal of Bitcoin’s stagnation is in the perpetual futures funding rates. BTC funding rates, which reflect the cost of holding long or short positions in crypto futures, are hovering close to 0%, indicating increasing indecisiveness among traders.

Bitcoin perpetual futures funding rates across all exchanges. Source: Glassnode

Without speculative fuel, Bitcoin is struggling to move in either direction, leaving its price stuck in a tight range as traders wait for the next catalyst.

Bitcoin price faces stiff resistance on the upside

Bitcoin also trades below key resistance areas, as shown in the chart below:

  • On March 9, BTC fell below the 200-day simple moving average (SMA) at $83,736.

  • This trendline has stifled the latest efforts for a sustained recovery.

BTC/USD daily chart. Source: Cointelegraph/TradingView

Popular crypto analyst Daan Crypto Trades says that the 200-day SMA at around $83,700 and the 200-day EMA at $86,000 are key levels as they are “solid indicators of the mid/long term trend and overall strength of the market.”

In other words, failure to produce a decisive close above the 200-day SMA and flipping it into a new support level could lead to a longer consolidation period for Bitcoin price.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.