Trump at Davos claims inflation is solved, but the market is telling a different story

Trump delivered a speech at the Davos Forum on Wednesday, claiming that his economic policies have brought prosperity and declaring that “inflation issues have been resolved.” However, the performance of the crypto markets over the past week stands in stark contrast to these remarks, with Bitcoin dropping from around $92,663 to $92,574, and gold reaching a historic high of $4,690. These phenomena reflect deep investor concerns about macroeconomic prospects.

Contradiction Between Statements and Reality

Trump’s Economic Narrative

Trump emphasized at Davos that, a year after returning to the White House, the US economy is “booming,” characterized by rapid economic growth, significant productivity gains, increased investments, and steady income rises. He also positioned the US as a “global economic engine,” implying that his policy model should serve as a global benchmark.

Market’s Calm Response

But the actual market performance shows investors remain unconvinced by this optimistic rhetoric. According to the latest reports, this week the crypto markets face multiple pressures:

• Gold hitting a record high, typically reflecting investor risk-averse demand for economic outlook
• Bitcoin, as a risk asset, under pressure rather than supported
• Escalating US-EU tariff tensions, with the EU considering tariffs on $108 billion worth of US goods
• Market liquidation reaching $864 million, indicating a rapid shift in investor sentiment

Variables Truly Impacting the Crypto Market

Tariff Uncertainty Suppresses Risk Sentiment

Trump’s tariff threats issued over the weekend are the immediate trigger for current market volatility. He threatened to impose a 10% tariff on eight European countries starting February 1, rising to 25% in June. This not only caused European automaker stocks to plummet (Mercedes-Benz down 6.7%, BMW down 7%) but also led to sell-offs in high-beta assets like cryptocurrencies.

Macro Data Is the Key

According to industry analysis, the real pricing power this week lies with macroeconomic data, including:

If these indicators show persistent inflation and economic resilience, rate cut expectations may further delay, putting pressure on high-beta assets like Bitcoin.

Political Uncertainty Temporarily Eases

It’s worth noting that the standoff between Trump and Fed Chair Powell has cooled amid opposition within the Senate and Republican ranks. The market generally believes that related investigations are unlikely to have substantive effects, which somewhat alleviates political risks.

The Reality of the Crypto Market

Not a Safe Haven, But a Risk Asset

The phenomenon of gold soaring to a record high while Bitcoin declines this week clearly indicates that, under geopolitical tensions, Bitcoin is still viewed by the market as a risk asset rather than a safe haven. This means that when economic uncertainty rises, Bitcoin is more prone to sell-offs.

In a Transition Phase

According to professional analysis, the crypto market is currently in a “macro bottoming, data disturbance” transition phase, not the start of a one-sided trend. This suggests that in the short term, high-level oscillations may persist, and a true directional breakout will depend on macro data confirmation.

Historical Patterns of Tariff Negotiations

It’s worth referencing that Trump’s past tariff strategies often follow a pattern: weekend tough talk, market sentiment collapsing first, then bottoming out, government officials stepping in to soothe, and finally reaching an agreement. However, the escalation of the Greenland dispute indicates that this year’s trade war could be more intense than in 2025.

Key Developments to Watch

• This week’s macro data: PCE, PMI, GDP revisions will reprice rate cut expectations, which are crucial for Bitcoin’s short-term trend
• Tariff negotiations progress: Whether Europe and the US can reach an agreement before February 1 will directly impact risk sentiment
• Geopolitical risks: Although Iran tensions have temporarily eased, US aircraft carrier deployments suggest risk premiums have not fully receded

Summary

Trump’s claims of economic prosperity and inflation being solved at Davos are political narratives. But the crypto market has voted against this with gold reaching a record high and Bitcoin falling. The market’s real focus now is whether upcoming macro data can confirm economic resilience and whether tariff threats will escalate into actual economic shocks. For crypto investors, this week’s data and negotiation developments are key to future trends. Short-term high-level oscillations may continue, and clearer signals are needed to confirm the direction.