A complete record of Trump's first year in office! Bitcoin big pump, gold hits new highs, 3.8 trillion deficit skyrockets.

Trump's presidency in 2025 triggers a market tsunami, with gold climbing to a high of $4,381, Bitcoin hitting a historic high of $125,800, and the S&P 500 index rising by 17%. However, the federal budget deficit is expected to increase by $3.8 trillion over the next decade, driving the 30-year Treasury yield up to 4.66%. The market learns “TACO trading,” as investors shift from panic to strategic responses, seeking rhythm amid fluctuations.

The US dollar opened high and fell, reflecting the divergence in Trump’s policies

(Source: Trading View)

After Trump took office in the White House again, the US dollar once surged significantly, as the market bet that his new round of tax cuts and fiscal stimulus plans would boost the economy and inflation. However, the “Trump trade” frenzy had a limited duration. Over the past year, the dollar index has fallen about 4% from its post-election peak, reflecting investors' repricing of risks related to the growing fiscal deficit, trade frictions, and foreign policy.

The foreign exchange analyst at In Touch Capital Markets, Piotr Matys, stated: “The core of Trump’s policy is 'America First', but the market often anticipates optimism prematurely. When the reality of tariff costs and rising debt becomes apparent, the dollar will no longer stand out on its own.” This statement reveals the core contradiction of the dollar's trend under Trump's administration: short-term fiscal stimulus boosts economic expectations supporting the dollar, but long-term debt expansion and trade friction weaken confidence in the dollar.

At the same time, the tariff policies introduced by Trump continue to spread, putting pressure on the global supply chain from rare earths, steel and aluminum to automobiles and technology products. This uncertainty is driving some capital toward alternative assets. The US dollar index has fallen 4% from its post-election peak, indicating that investors are reassessing the reliability of the dollar as a safe-haven asset. When the United States itself becomes the source of trade friction and policy uncertainty, the dollar's safe-haven attributes are weakened.

The weakness of the US dollar has multiple impacts on the global market. For emerging markets, a weak dollar alleviates debt burdens and capital outflow pressures, providing these economies with breathing room. For commodities, a weaker dollar typically raises commodity prices, as commodities are priced in dollars, making them cheaper for holders of other currencies when the dollar depreciates. For cryptocurrencies, the weak dollar and distrust in the traditional financial system drive investors to seek alternative stores of value, with Bitcoin and gold being the main beneficiaries.

Gold reaches a new high of 4,381 USD, Bitcoin soars to 125,000

(Source: Trading View)

Under its “crypto-friendly” policies and institutional funding, Bitcoin skyrocketed to a historic high of $125,800 in October 2024; gold also climbed to a record high of $4,381 per ounce due to safe-haven demand. These two assets, traditionally viewed as competitors, simultaneously reached new highs during the Trump era, a phenomenon that reveals the market's demand for hedging against multiple risks.

The rise in gold prices is mainly driven by safe-haven demand. Trump's tariff policies, geopolitical tensions (especially trade conflicts with China and Europe), and concerns over fiscal deficits have all prompted investors to increase their holdings of gold. Central banks around the world are also accelerating gold purchases, particularly in countries like China, Russia, and India, which seek to reduce their dependence on the US dollar and diversify their reserve assets. The gold price of $4,381 has risen over 50% since Trump took office, setting a new historical high.

(Source: Trading View)

The surge in Bitcoin reflects the direct impact of Trump's “crypto-friendly” policies. Trump's dismissal of SEC Chairman Gary Gensler, the establishment of a national Bitcoin reserve, and policies allowing retirement accounts to invest in cryptocurrencies have injected strong bullish sentiment into the market. In addition, the continuous inflow of funds into Bitcoin ETFs and the acceleration of institutional adoption have provided structural support for prices. The historical peak of $125,800 means that Bitcoin's market capitalization has surpassed $2.5 trillion, surpassing silver to become the eighth largest asset in the world.

The synchronous rise of gold and Bitcoin reflects investors' wavering confidence in the fiat currency system. When the dollar fluctuates due to policy uncertainty, when fiscal deficits continue to expand, and when geopolitical risks escalate, investors naturally seek value storage that does not rely on any single government. Gold, as a value storage for thousands of years, and Bitcoin, as the “digital gold” of the digital age, have become the most popular alternative assets of this era.

Bond market sounds alarm, 3.8 trillion deficit bomb detonates

The Trump administration passed a tax reform bill called “One Big Beautiful Bill” in July, which is expected to increase the federal fiscal deficit by about $3.8 trillion over the next decade. Investors are concerned about the surge in U.S. debt supply and fiscal sustainability, pushing overall yields higher. The 30-year U.S. Treasury yield has risen to 4.66% since last November, while the yield on Japanese government bonds of the same maturity soared by 85 basis points to a record high. The yields on 30-year government bonds in France and Germany also rose by 62 and 59 basis points, respectively.

The simultaneous rise in global bond yields is extremely rare and reflects widespread concerns in the market about the fiscal sustainability of developed countries. The increase in the deficit by $3.8 trillion means that the U.S. government needs to issue more national debt to finance it, and the increase in supply naturally pushes up yields. More worryingly, as yields rise, the government's interest expenses also increase, creating a vicious cycle.

Although the Federal Reserve has cut interest rates twice in a row and announced the end of quantitative tightening (QT) in December, concerns about future debt financing pressures still exist in the market. The fixed income department of Wells Fargo commented: “The fiscal expansion of the Trump administration is fuel for short-term growth, but it may become a hidden worry for the bond market in the long term.”

The rise in bond yields has a chain effect on multiple markets. For the stock market, higher risk-free rates reduce the relative attractiveness of stocks, potentially triggering a revaluation. For real estate, rising mortgage rates suppress housing demand. For emerging markets, the increase in U.S. Treasury yields may trigger capital to flow back to the United States.

TACO Trading Methods and Market Strategic Responses

After a year of repeated fluctuations, investors seem to have grasped the market rules under Trump's administration. The so-called “TACO trading method”—“Trump Always Chickens Out”—has become a popular phrase on Wall Street. Investors have learned to use his “pressure first, concede later” negotiation style for swing trading, and the market has shifted from panic to strategic responses.

The core logic of the TACO trading method is: do not panic sell when Trump announces radical policies, as he is likely to compromise or delay during the implementation phase. When the market crashes due to his threats, it is actually a buying opportunity. This strategy has proven effective multiple times over the past year, for example, when Trump has threatened to impose high tariffs on Europe and China, but ultimately reduced tax rates or granted exemptions during negotiations.

Bitwise strategist Juan Leon summarized: “The market is no longer simply fearing the uncertainty of Trump, but is learning to find a rhythm within it. The fluctuations are severe, but they also give rise to new structural opportunities.” This market adaptability indicates that investors are maturing, shifting from emotion-driven behavior to rational strategies based on Trump's behavioral patterns.

Trump's First Year in Office Market Performance

Gold: Reaches a historical high of 4,381 USD (surge in safe-haven demand)

Bitcoin: Soared to $125,800 (driven by crypto-friendly policies)

U.S. Stocks: S&P 500 increased by 17% (boosted by AI and tax cuts)

Dollar: Pullback of 4% from the higher point (policy divergence evident)

US Bonds: 30-year yield rises to 4.66% (deficit concerns)

Trade Deficit: Falls to $60.2 billion, a two-year low (tariffs are effective but at a high cost)

After experiencing a year intertwined with inflation, deficits, geopolitical and technological shifts, the global capital markets have entered a new stage profoundly shaped by political forces. Trump's economics is no longer the traditional “supply-side stimulation,” but rather a form of “high-pressure fiscal experiment”—trading high fluctuation for growth and reshaping order through friction. Looking ahead, the market will continue to focus on three core variables: the Federal Reserve's policy shift, the boundaries of Trump's trade policy, and the long-term valuation logic of AI and crypto assets.