Bitcoin traders brace for White House surprises that may send prices lower

Everyone’s watching Donald Trump right now.

As Bitcoin continues to trade between $65,000 and $70,000 on the back of the US and Israel’s attack on Iran on February 28, market watchers brace for new bombshells coming out of the White House that will rock the price further.

The worry is that the unpredictability of the Trump administration will jeopardise the stability of the price.

“Surprise statements — whether negative or positive — can influence how stable the price will be,” Nicolai Søndergaard, research analyst at Nansen, told DL News. “Ultimately, we are looking for stability and no surprise statements that quickly swing the price in either direction.”

That is no easy feat, given the often conflicting statements coming out of the White House on the topic of the war.

“The government of the United States [is] saying one thing and the government of Iran is saying another — [the] market doesn’t know what’s true and reacts immediately,” Søndergaard said.

The worries come as the general chaos of the war risks exacerbating the strain on the US economy, and force the Federal Reserve to hike interest rates, which is usually bad for risk-on assets like Bitcoin.

Crypto support

This sense of weariness is a far cry from the celebratory mood that erupted across the crypto industry when Trump was elected in 2024.

The crypto lobby helped catapult him into the White House for a second time by pouring over $133 million into the election, according to Molly White, a crypto researcher who tracks the industry’s lobby expenses.

The industry’s bet that Trump would keep his manifesto promises initially seemed to have paid off. The president signed executive orders, hosted crypto summits, pardoned industry leaders, appointed pro-crypto people to key government roles, and inked a landmark stablecoin bill into law.

Crypto markets soared.

But the bullishness didn’t last. Trump’s erratic approach to foreign policy — such as threatening countries with sky-high tariffs, demanding that NATO ally Denmark give him Greenland, and the war in Iran — has erroded some of that optimism.

That, combined with big Bitcoin holders selling their hordes to take profits, have seen the price of the world’s top crypto fall by 45% since its October $126,080 record high.

That has weighed on the rest of the crypto market, which has lost about half of its total value in that period. The market is now worth $2.4 trillion.

Polymarket traders are giving Bitcoin a 74% chance of falling as low as $55, 000 this year.

Federal Reserve

Bitcoin’s success is tied to the performance of the US economy.

If inflation drops, then it’s more likely that the Federal Reserve will cut interest rates. Lower interest rates usually incentivise investors to invest in risk-on assets like Bitcoin.

Just a few weeks ago, traders were banking on the prospect of the Fed cutting interest rates. However, the outbreak of the war in the Middle East has all but wiped out the chances of that happening anytime soon.

Several central bank governors have made hawkish noises, suggesting that the chances of rate cuts are quickly vanishing as energy prices skyrocket.

Traders are now looking for hints about the Fed’s next moves. This week, that means the latest payrolls report from the Department of Labor, which will be published on Friday.

“All eyes are on the upcoming US jobs report,” Lukman Otunuga, head of market research at trading broker FXTM, said in comments emailed to DL News.

While the jobs report could be bad, it won’t be enough by itself to trigger a Bitcoin price drop below $60,000 Louis De Backer, and Samuel Leyne at Marex told DL News. They are, respectively, an analyst and a cross asset derivatives sales trader at the financial services platform.

Only a second shock such as a major escalation of the Iran war that pushes the price of oil up higher or a crypto specific liquidity event would result in the price being dragged even lower, De Backer and Leyne said.

How Bitcoin can recover

To be sure, De Backer and Leyne say that there is a chance for Bitcoin to bounce back — but only if two things happen.

First, macro pressure on the economy must stop increasing. That means lower interest rates and oil prices.

Second, inflows into Bitcoin exchange-traded funds need to pick up momentum. There are signs that might be happening. In March, investors piled $1.3 billion into US Bitcoin investments, according to DefiLlama data.

That marks the first time in four months that Bitcoin ETFs have seen positive inflows. If that continues,  Bitcoin may be on the way back towards $80,000 price, James Butterfill, head of research at CoinShares, told DL News at the end of March.

If there are no more surprises coming out of the White House, that is.

“Trump is generally seen as long-term bullish for Bitcoin due to the pro-crypto policies of his administration,” De Backer and Leyne said.

They added that Trump’s “economic and geopolitical decisions can create significant short-term volatility across all asset classes globally, particularly so for the crypto market.”

Update April 1: The headline, the third and seventh paragraph have been updated for clarity. The story has also been updated to include the Polymarket data.

Eric Johansson is DL News’ managing editor. Got a tip? Email him at eric@dlnews.com