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Crypto Faces Uncertain Future As Trumps Short-Term Pain Plan Unfolds
US President Trumps outspoken acceptance of near-term economic hardship has placed risk assetsincluding Bitcoin (BTC) and the broader crypto marketunder mounting pressure. According to a thread by The Kobeissi Letter on X, President Trumps 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 Trumps ‘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 Trumps 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. Related Reading: Crypto Bull Run Isnt OverIts Just Changing, Says Analyst 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 markets 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 Lutnicks statement on March 6Stock market not driving outcomes for this adminwas followed by Treasury Secretary Bessents remark, Not concerned about a little volatility. Although The Kobeissi Letters analysis notes that the administrations viewpoint solidified before inauguration, it cites President Trumps 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. Related Reading: Economic Turmoil: Crypto Market Loses 25% Of Value As Recession Worries Mount Beyond debt concerns, The Kobeissi Letter also highlights the administrations 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 Trumps 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 administrations 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 Trumps economic strategy?. At press time, the BTC price remained under heavy downward pressure and traded at $82,000. Featured image from Shutterstock, chart from TradingView.com
