US President Donald Trump began his speech at the World Economic Forum (WEF) in Davos. Meanwhile, the cryptocurrency market experienced a sharp sell-off amid increased uncertainty and volatility. The decline, led by Bitcoin and XRP on January 21st, spread to major altcoins like Ethereum and Solana. With investors focused on global macroeconomic messages, market risk appetite weakened significantly.
According to market data, Bitcoin lost over 2.9% overnight, falling to $88,484. XRP fell 2.2%, trading at $1.89. Ethereum experienced an even sharper decline; the second-largest cryptocurrency dropped 6.1% to $2,917. Solana fell 1.6%, trading around $127. This picture indicates that investors preferred to reduce their positions ahead of Trump's speech in Davos.
The nervousness in the markets before Trump's speech began was particularly linked to expectations regarding his statements on US trade policies and the global economy. Trump, who had previously delivered harsh messages regarding new tariffs and trade policies targeting Europe, was expected to follow a similar line in Davos. This expectation increased selling pressure on cryptocurrencies, which are considered risky assets.
Trump's Davos speech began
With the start of Trump's speech in Davos, the economic messages gained a clearer framework. The US President emphasized that the country's economy was in a strong recovery process and that inflation was under control. Stating that core inflation was at 1.5 percent, Trump said that the US economy was experiencing one of the fastest recoveries in its history. He also stated that the fourth-quarter growth expectation was 5.4 percent and that the US economy had reached twice the growth rate predicted by the IMF. In his speech, Trump also touched upon the US's global position, arguing that his country was one of the most attractive economic centers in the world. The US President, criticizing Europe, stated that green energy policies and mass immigration have deepened economic and social problems in some European countries. However, he emphasized that European countries, Japan, and South Korea are important partners of the US.
Trump also highlighted the US performance in trade and energy. Praising the increase in American exports and the rise in domestic steel production, Trump noted that the monthly trade deficit had been reduced by 77 percent. He stated that US natural gas production had reached an all-time high and also drew attention to oil purchases from Venezuela.
These statements indicate that pricing in the cryptocurrency market, as in global markets, will continue to be shaped by macroeconomic expectations. In particular, strong growth and low inflation messages regarding the US economy are seen as critical signals for interest rate policies and the trajectory of the dollar. This suggests that volatility in crypto assets may remain high in the short term.
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