Trump is back: How to find investment opportunities amid policy turmoil

Author: Revc

1. **The impact of Trump’s new term on the encryption market: the

game between policy and economy**

As Trump returns to lead the United States, changes in the crypto market and related policies in 2025 have become the focus of investors. Trump’s first term promoted the prosperity of the U.S. stock market, gold market, and crypto assets through tax cuts, deregulation, trade wars, and monetary policies. Now, as the new term approaches, Trump's policies, the power structure of Congress, and changes in the global economic environment will have a profound impact on the crypto market, and investors' anxiety and uncertainty have also intensified.

Crypto Market Policy Changes: From Skepticism to Support

During Trump’s first term, the U.S. government had a more conservative attitude toward the crypto market, especially in the regulation of crypto assets such as Bitcoin. However, with the gradual acceptance of blockchain technology, Trump’s policies began to shift towards supporting the encryption industry. It is expected that during his second term, Trump may encourage market liquidity and enhance investor confidence through tax cuts and crypto- support policies, further supporting the rise of crypto assets.

Data related:

- Bitcoin has gone from around $1,000 in 2017 when Trump took office to nearly $60,000 in 2021, and support for Trump’s policies is expected to further drive Bitcoin’s rise.

- According to the CoinShares 2024 Report, the U.S. market’s interest in crypto-assets is rising year by year and is expected to continue to grow in 2025, especially driven by institutional investors.

The power structure of the House of Representatives and the Senate and the game of the crypto market

Trump's new term will face political pressure from Congress, especially the Democratic-controlled House of Representatives. In the mid-term elections in November 2026, the Democratic Party may control the House of Representatives, which will impose constraints on Trump's promotion of crypto market-related policies, especially in terms of crypto asset regulation. Based on past experience, midterm elections are usually unfavorable to the ruling party. The president’s party loses an average of more than 20 seats in the House of Representatives and several seats in the Senate. However, Trump can still rely on Republican support in the Senate to push forward some policies, especially support for blockchain technology and crypto assets. It is expected that the election results after 2026 may have a significant impact on the Trump administration's policy implementation.

Key people:

- Elizabeth Warren (Democrat): has long advocated for greater regulation of crypto-assets, particularly in the areas of anti-money laundering, tax compliance and market transparency.

- Brad Sherman (Democrat): Joins Warren in pushing for stricter anti-money laundering and financial stability measures.

Despite pressure from Democratic figures, Trump’s support in the Senate will help drive policy on the crypto market.

2. Two relatively stable investment routes

In the current market uncertainty, investors can focus on the following two relatively stable investment routes: AI Agent track and Trump concept tokens.

AI Agent track: a safe and resilient investment direction

With market uncertainty, the AI ​​Agent track has become a relatively safe investment direction. Several leading AI Agent projects have demonstrated strong rebound capabilities during the correction. For example, Virtuals Protocol has driven its market capitalization back to $2.1 billion through technology updates and new collaborations, and other projects such as AIXBT and Griffin have also performed well, driving up prices.

- Rebound and toughness of AI Agent track

Although the overall crypto market is at risk of a correction, the AI ​​Agent track has become one of the best-performing sectors. Several top projects have shown strong recovery power after experiencing corrections, with rebound rates as high as 130%. For example, Virtuals Protocol updated its mechanism after a sharp correction, allowing its market value to rise back to $2.1 billion, which enhanced market confidence and promoted price increases.

- Technological breakthroughs and ecological development in the AI ​​Agent track

The technological and ecological progress of the AI ​​Agent project is one of the important reasons why it attracts investors. Virtuals Protocol has recently further strengthened its ecosystem through cooperation with well- known brands such as Animoca Brands and Illuvium. Through collaboration with agency partners, the project promotes the incentive mechanism of the platform and ecosystem, further providing a solid foundation for ecological expansion.

- The difference between the independent trend of AI Agent and traditional projects

Compared with traditional encryption projects, AI Agent has demonstrated more innovative capabilities in operational governance, decentralized asset issuance, and technology applications. Thanks to these innovations, the AI ​​Agent track has attracted more investors with high risk appetite.

Trump Concept Token: Investment Opportunities and Market Momentum

As Trump gradually supports cryptocurrencies, multiple crypto projects related to him have begun to emerge, the most notable of which is the WLFI (World Liberty Financial) token. Although WLFI’s token terms and utility are not ideal, its deep relationship with Trump and the brand effect of the Trump family may provide additional market momentum for WLFI.

On the other hand, despite the uncertainty about WLFI's performance, more investors may pay attention to Trump's chosen cooperation projects. These projects are backed by Trump’s concepts and also have strong fundamentals. For example, projects such as Ethereum (ETH), Aave (AAVE), and Chainlink (LINK) have demonstrated strong market potential through cooperation with Trump. In particular, World Liberty's cooperation with platforms such as Ethereum and Scroll may bring more on-chain data and cross-chain connection applications, which provides strong support for the rise of related tokens.

In addition, the market's attention to the concept of RWA (Real World Assets) is also increasing. Ondo Finance, as the leading project on the RWA track, has achieved significant gains in recent times. Trump’s policies may accelerate the maturity of the RWA concept, promote the combination of more physical assets and digital assets, and bring new investment opportunities to the market.

3. Trading Vane - **Pay attention to the impact of the

economy (** CPI inflation) on the Federal Reserve’s decision-making

The Federal Reserve's economic judgments, such as its assessment of employment rates and inflation levels, may be interfered with by principal component factors, especially in the context of the current rapid changes in the economic structure.

The impact of employment changes in the technology and AI industries on economic indicators

With the booming development of the technology industry, especially the rapid rise of the field of AI, the demand for highly skilled labor has surged. At the same time, demand for human resources in traditional industries has slowed down, and layoffs have even occurred. Such structural differences may distort overall employment data. For example, job losses in traditional industries may be masked by higher-paying jobs in emerging technology industries, making the overall unemployment rate look good.

Interference Factors in the Federal Reserve’s Economic Judgment

- Data lags and revisions: Lags and late revisions of macroeconomic data may cause the Fed's judgments based on lagging data to deviate from actual economic conditions.

- Limitations of a single indicator: The Fed's over-reliance on certain single economic indicators (such as core PCE inflation) may lead to one-sided judgments.

- Geopolitics and emergencies: Geopolitics and emergencies (such as natural disasters) can affect the economy. These factors are often difficult to predict and bring uncertainty to the Fed's judgment.

Investors’ strategies

Considering that the Federal Reserve’s judgment may be affected by many factors, investors can adopt the following strategies:

- Pay attention to a wider range of data: pay attention to detailed industry data, consumer confidence, corporate profits, etc.

- Emphasis on micro-level analysis: gain a comprehensive understanding of economic and market conditions through industry and company analysis.

- Maintain independent thinking: Do not blindly rely on the judgment of the Federal Reserve and make decisions based on your own research.

- Do a good job in risk management: The crypto market is highly volatile, so do good position management to avoid over-investment.

4. Pay attention to the Bank of Japan’s interest rate hikes

The policy trends of the Bank of Japan have a significant impact on global markets. According to the latest data, market expectations for the Bank of Japan to raise interest rates at the January 23-24 meeting are close to 99%. Bank of Japan Governor Kazuo Ueda said that as confidence in wage growth increases, interest rate hikes are highly likely.

The impact of interest rate hikes on global markets

Japan 's interest rate hikes may cause the yen to appreciate, thereby affecting global capital flows. There may be an outflow of funds away from riskier assets, such as cryptocurrencies, and towards more stable asset classes. In addition, interest rate hikes may lead to adjustments in Japanese investors' arbitrage trading strategies, affecting liquidity and risk appetite in global markets.

summary

Trump's return brings huge uncertainty and potential to the market, especially with the multifaceted changes in policy, politics and the economy. His policies are expected to drive up inflation, which will affect U.S. bond yields and gold prices, while exacerbating global trade tensions and potentially triggering volatility in the stock market. However, cryptoassets may benefit from policy clarity and increased institutional participation. Investors should pay attention to investment opportunities such as the AI ​​Agent track and Trump concept tokens, and at the same time flexibly adjust strategies to respond to risks and opportunities brought about by policy changes, and grasp short-term volatility and long-term growth potential.