Trump’s Painful Plan: Will Crypto Survive the Chaos? 🤔💸

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In a most curious turn of events, the high-flying realms of tech stocks and cryptocurrencies have taken a rather alarming nosedive, all thanks to the grand spectacle of Donald Trump’s trade war. One might say it’s akin to watching a particularly clumsy ballet, where the dancers are all too aware of their impending doom.

Yet, fear not! This calamity may merely be a part of a “short-term pain” strategy, a masterstroke designed to lower inflation and refinance a staggering $9 trillion of US debt. The Kobeissi Letter, that bastion of financial wisdom, has reported this audacious plan with a flair that would make even the most seasoned con artist blush.

“We have seen over $5 trillion erased from US stocks with the goal of lowering rates. Will it work?”

Planned Market Turmoil

It appears the administration is singing from the same hymn sheet, with Commerce Secretary Howard Lutnick declaring, “The stock market is not driving outcomes for this admin.” Treasury Secretary Scott Bessent, in a fit of bravado, proclaimed he’s “not concerned about a little volatility.” Meanwhile, Trump himself has acknowledged a “period of transition” that will “take a little time.” One can only imagine the collective eye-rolls from the financial elite.

Even the ever-controversial Elon Musk has thrown his hat into the ring, assuring us that Tesla stock “will be fine long-term,” despite its rather dramatic 40% plunge since the year began. Ah, the optimism of billionaires!

It’s very clear what’s happening:

President Trump now believes “short-term pain” is his ONLY option to lower inflation and refinance $9+ trillion of US debt.

We have seen over -$5 TRILLION erased from US stocks with the goal of LOWERING rates.

Will it work?

(a thread)

— The Kobeissi Letter (@KobeissiLetter) March 13, 2025

This intentional market tanking may be spurred by a record government deficit of $1.15 trillion in February, a desire to lower oil prices, and a rather ambitious plan to reduce the US trade deficit through tariffs. Not to mention the goal of trimming government jobs that have been the backbone of recent job growth. Who knew economic strategy could be so… theatrical?

Trump’s economic plans seem to have several lofty goals: lowering inflation (currently a modest 2.8%), oil prices, and interest rates, while simultaneously slashing deficit spending and government inefficiency. A veritable buffet of economic aspirations!

Economist Joe Foudy, in a moment of clarity, told Newsweek that this is a “political recognition” before adding:

“If the stock market responds negatively or if we see weaker economic data, Trump needs to get ahead of the narrative. By framing short-term economic downturns as necessary for long-term gains, he is managing expectations.”

“Normally, the Federal Reserve would lower interest rates to stabilize the economy. But if tariffs drive up prices, policymakers may hesitate, fearing rate cuts could fuel inflation,” mused NYU economics professor Lawrence White. A delightful conundrum, indeed!

Trump is clearly telling his plans.

He doesn’t care about the stock market or the crypto market.

All he cares about is that interest rates go down, which will definitely cause some short-term pain.

This reminds me of Q4 2021 when Powell was calling for higher rates and…

— Cas Abbé (@cas_abbe) March 13, 2025

Impacts on Crypto Markets

This “short-term pain” approach could lead to significant market volatility across all asset classes, including cryptocurrencies. As traditional markets experience downturns, investors may reduce exposure to high-risk assets like crypto to cover losses elsewhere or move to cash positions, especially if interest rates decide to play hard to get again.

Market instability could also lead to liquidity issues in crypto markets, potentially causing exaggerated price movements. Crypto might continue to follow stock market trends in the short term, much like a lost puppy. The market has already declined by around 25% over the past couple of months as $1 trillion has exited stage left.

In the long run, lowering interest rates could eventually benefit crypto as an alternative investment when

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2025-03-14 10:29