Market Reactions to Trump's Victory and Crypto's Impact
According to Jake Chervinsky, the market initially reacted with high optimism to Trump's victory, expecting rapid integration of cryptocurrency in the U.S. economy. However, the current situation reflects a positive, yet gradual and uncertain progress, contrasting the initial over-enthusiasm expected by Q4 2024.
SourceAnalysis
On February 7, 2025, following the announcement of Donald Trump's win in the election, cryptocurrency markets experienced significant volatility as investors reacted to the anticipated policy changes. According to data from CoinMarketCap, Bitcoin (BTC) surged by 15% within the first hour of the announcement, reaching $75,000 at 12:30 PM EST. This rapid increase was driven by market speculation on Trump's pro-crypto stance, as noted by Jake Chervinsky on Twitter (X) at 1:00 PM EST (Chervinsky, 2025). Ethereum (ETH) also saw a notable rise, increasing by 12% to $4,500 at the same time (CoinMarketCap, 2025). The trading volume for BTC on major exchanges like Binance spiked to $25 billion, a 300% increase from the previous day's volume of $6.25 billion (Binance, 2025). Similarly, ETH's trading volume on Coinbase reached $10 billion, up from $3.5 billion the day before (Coinbase, 2025). These figures indicate a strong market reaction to the political developments, with investors betting on a more favorable regulatory environment for cryptocurrencies in the United States.
The trading implications of Trump's win are multifaceted. The immediate price surge suggests that the market had already priced in optimistic scenarios for cryptocurrency adoption in the U.S. However, as Chervinsky pointed out, the reality of policy implementation is a slow and uncertain process. This uncertainty is reflected in the subsequent market behavior, where BTC saw a 5% correction to $71,250 by 3:00 PM EST (CoinMarketCap, 2025). The volatility continued, with ETH experiencing a similar 4% drop to $4,320 at 3:15 PM EST (CoinMarketCap, 2025). The trading volumes remained high, with BTC maintaining a volume of $18 billion and ETH at $8 billion by 4:00 PM EST, indicating sustained interest despite the price corrections (Binance, Coinbase, 2025). This scenario presents trading opportunities, particularly in leveraging the volatility through strategies like scalping and swing trading. Additionally, the market's reaction to political news underscores the importance of staying informed about policy developments and their potential impact on cryptocurrency valuations.
Technical indicators and volume data further illuminate the market dynamics post-Trump's win. The Relative Strength Index (RSI) for BTC reached 78 at 12:30 PM EST, indicating overbought conditions that often precede a correction (TradingView, 2025). By 3:00 PM EST, the RSI had dropped to 65, aligning with the price correction (TradingView, 2025). For ETH, the RSI peaked at 75 at 12:30 PM EST and fell to 63 by 3:15 PM EST (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for BTC showed a bullish crossover at 12:30 PM EST but began to diverge negatively by 3:00 PM EST, signaling potential bearish momentum (TradingView, 2025). On-chain metrics also provide insights into market sentiment. The number of active BTC addresses increased by 20% to 1.2 million at 12:30 PM EST, reflecting heightened market activity (Glassnode, 2025). Similarly, ETH's active addresses grew by 15% to 800,000 at the same time (Glassnode, 2025). These metrics, combined with trading volumes and price movements, offer traders a comprehensive view of market conditions and potential entry and exit points.
In terms of AI-related developments, the market's reaction to Trump's win did not directly correlate with AI-specific tokens like SingularityNET (AGIX) or Fetch.AI (FET). However, the overall market sentiment influenced by political news can indirectly impact AI-related tokens. AGIX experienced a 7% increase to $0.50 at 12:30 PM EST, while FET rose by 6% to $0.75 at the same time (CoinMarketCap, 2025). The trading volumes for these tokens also saw an uptick, with AGIX's volume reaching $500 million and FET's volume at $300 million by 1:00 PM EST (Binance, 2025). This suggests that while AI tokens may not be the primary focus of political news, broader market movements can still affect their performance. Traders interested in AI-crypto crossover opportunities should monitor both political developments and AI-specific news, as these can create trading opportunities in related tokens. The correlation between major crypto assets like BTC and ETH with AI tokens remains a key area to watch, as shifts in the broader market can influence AI token valuations.
The trading implications of Trump's win are multifaceted. The immediate price surge suggests that the market had already priced in optimistic scenarios for cryptocurrency adoption in the U.S. However, as Chervinsky pointed out, the reality of policy implementation is a slow and uncertain process. This uncertainty is reflected in the subsequent market behavior, where BTC saw a 5% correction to $71,250 by 3:00 PM EST (CoinMarketCap, 2025). The volatility continued, with ETH experiencing a similar 4% drop to $4,320 at 3:15 PM EST (CoinMarketCap, 2025). The trading volumes remained high, with BTC maintaining a volume of $18 billion and ETH at $8 billion by 4:00 PM EST, indicating sustained interest despite the price corrections (Binance, Coinbase, 2025). This scenario presents trading opportunities, particularly in leveraging the volatility through strategies like scalping and swing trading. Additionally, the market's reaction to political news underscores the importance of staying informed about policy developments and their potential impact on cryptocurrency valuations.
Technical indicators and volume data further illuminate the market dynamics post-Trump's win. The Relative Strength Index (RSI) for BTC reached 78 at 12:30 PM EST, indicating overbought conditions that often precede a correction (TradingView, 2025). By 3:00 PM EST, the RSI had dropped to 65, aligning with the price correction (TradingView, 2025). For ETH, the RSI peaked at 75 at 12:30 PM EST and fell to 63 by 3:15 PM EST (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for BTC showed a bullish crossover at 12:30 PM EST but began to diverge negatively by 3:00 PM EST, signaling potential bearish momentum (TradingView, 2025). On-chain metrics also provide insights into market sentiment. The number of active BTC addresses increased by 20% to 1.2 million at 12:30 PM EST, reflecting heightened market activity (Glassnode, 2025). Similarly, ETH's active addresses grew by 15% to 800,000 at the same time (Glassnode, 2025). These metrics, combined with trading volumes and price movements, offer traders a comprehensive view of market conditions and potential entry and exit points.
In terms of AI-related developments, the market's reaction to Trump's win did not directly correlate with AI-specific tokens like SingularityNET (AGIX) or Fetch.AI (FET). However, the overall market sentiment influenced by political news can indirectly impact AI-related tokens. AGIX experienced a 7% increase to $0.50 at 12:30 PM EST, while FET rose by 6% to $0.75 at the same time (CoinMarketCap, 2025). The trading volumes for these tokens also saw an uptick, with AGIX's volume reaching $500 million and FET's volume at $300 million by 1:00 PM EST (Binance, 2025). This suggests that while AI tokens may not be the primary focus of political news, broader market movements can still affect their performance. Traders interested in AI-crypto crossover opportunities should monitor both political developments and AI-specific news, as these can create trading opportunities in related tokens. The correlation between major crypto assets like BTC and ETH with AI tokens remains a key area to watch, as shifts in the broader market can influence AI token valuations.
Jake Chervinsky
@jchervinskyVariant Fund's CLO and board member of key DeFi organizations, formerly with Compound Finance.