Trump speaks at Davos, boosting the dollar; the crypto market seeks balance amid policy friendliness and appreciation pressure

The US Dollar Index DXY recently surged by about 10 points, directly triggered by strong remarks made by Trump at Davos. This not only reflects the sensitivity of the dollar as a risk asset but also mirrors the complex environment faced by the current crypto market: dollar appreciation typically suppresses risk assets, yet the crypto-friendly policies of the Trump administration are injecting confidence into the market. This contradictory coexistence is reshaping the investment logic of the crypto market.

How Trump’s Remarks Boost the Dollar

According to the latest news, Trump made two key statements at the World Economic Forum in Davos. First, claiming “America is strong, our economy is recovering robustly, and the US is once again leading the world”; second, commenting on Canada, emphasizing the US sovereignty stance. Such remarks are usually interpreted by the market as optimistic expectations for the US economy and confirmation of the dollar’s strength.

The logic behind the dollar’s appreciation is straightforward: when the US President emphasizes a strong economy and America First, investors tend to increase holdings of dollar assets, expecting the Federal Reserve to maintain relatively high interest rates to support the economy. While a 10-point rise in DXY may seem modest, in the highly liquid foreign exchange market, it reflects a substantial inflow of funds.

Resilience and Pressure Coexist in the Crypto Market

Dollar appreciation generally puts pressure on cryptocurrencies because crypto assets are usually valued in USD, and a stronger dollar raises the relative cost of other assets. However, recent data shows that the crypto market has demonstrated interesting resilience.

According to information as of January 26:

• BTC has rebounded to $87,700
• The total market cap of cryptocurrencies, though down 1.8% to $3 trillion, remains relatively stable
• The market faces multiple risks this week (Fed rate decision, Trump tariff threats, government partial shutdown risks, tech earnings, etc.), but there has been no panic selling

This indicates that the market is digesting the pressure from dollar appreciation while also assessing the Trump administration’s friendly stance toward crypto.

Signals of Policy Friendliness Are Strengthening

This is key to understanding the current market. The official White House account recently posted that under Trump’s leadership, the US has become the world’s cryptocurrency capital. New Chair of the US Commodity Futures Trading Commission, Mike Selig, subsequently stated that the CFTC is modernizing rules and regulations to ensure the future of crypto and on-chain finance, aiming for “Made in America.”

This is not just a casual statement but a concrete regulatory action signal. Compared to the history of crypto bans in 2017, the current policy environment has undergone a fundamental shift. The increased policy friendliness is partially offsetting the negative impact of dollar appreciation on crypto assets.

What Does the Trump Family’s Crypto Deployment Reveal?

Even more interesting is the crypto activity within the Trump family. According to information, the Trump-related wallet recently exchanged $8 million worth of WBTC for 2,868 ETH and has been continuously withdrawing WBTC from Aave. This indicates they are adjusting their crypto asset allocation, shifting from Bitcoin to the Ethereum ecosystem.

Meanwhile, the Trump family’s WLFI project deposited 235 million WLFI tokens into Binance on January 26, worth about $40.63 million. Such large transactions usually suggest preparations for subsequent actions, possibly to increase liquidity or prepare for exchange listing.

These moves show that the Trump family not only supports crypto at the policy level but is also actively participating in the crypto market, further reinforcing market confidence in crypto assets’ prospects.

Market Balance to Watch

The current market environment involves a delicate balance:

• Dollar appreciation pressure (from Trump’s remarks and economic expectations)
• Positive crypto policy signals (from the White House and regulators)
• Macro risks (Fed rate decision, tariff threats, government shutdown potential)

The breaking point of this balance could occur at several moments:

1. Fed rate decision (this week, 97% probability of no change)
2. Implementation of tariff policies
3. Tech earnings reports (Microsoft, Meta, Tesla, Apple)
4. Announcement of specific crypto regulatory reforms

Summary

Trump’s remarks boosting the dollar have indeed exerted short-term pressure on the crypto market, but this pressure is being offset by expectations of policy friendliness. The current market logic is no longer simply “dollar appreciation equals crypto decline,” but a more complex game: investors are weighing macroeconomic expectations against policy environment changes.

The Trump family’s own crypto positioning further confirms this. The market is not panicking over dollar appreciation but is re-pricing the value of crypto assets under the new policy environment. The key factors moving forward are the progress of regulatory reforms and macroeconomic data, which will determine whether this balance can be maintained.