Since Donald Trump’s return to the White House in 2025, the global macroeconomic landscape has entered a renewed period of uncertainty. In parallel, the crypto asset market has undergone a significant structural evolution, transitioning from a relatively insular, self-contained industry to one increasingly integrated with traditional financial markets. This shift has been accelerated by the introduction of crypto ETFs introduced to institutional investors and by Trump’s publicly supportive stance on digital assets.

The profile and behaviour of market participants in 2025 differ markedly from those seen in 2022–2023. Crypto trading is now heavily influenced by macro-forces, including recent monetary policy shifts and a rapidly evolving global trade environment, particularly as tariff tensions intensify. Whereas the crypto market was largely driven by internal, industry-specific catalysts in 2022 and 2023, the dominant forces in 2024 and 2025 have decisively shifted toward institutional adoption and regulatory alignment. As a result, crypto assets have become more correlated with traditional risk assets, while still retaining their characteristic high volatility and beta. During periods of heightened market stress, digital assets often react earlier and more acutely than equities or other traditional instruments.

This volatility is underpinned by the absence of a standardized framework for evaluating crypto fundamentals. Unlike conventional financial assets, the intrinsic value of cryptocurrencies remains difficult to define, quantify, or reach consensus on. Consequently, in risk-off environments, crypto assets are frequently the first to be sold off as investors de-risk their portfolios. Since the beginning of 2025, crypto markets have exhibited leading negative reactions to macroeconomic risks, such as the escalation of trade tensions, than indices like the S&P 500 or Nasdaq. As traditional financial institutions increasingly allocate to digital assets, the crypto market has become more sensitive to broader macroeconomic cycles. Interestingly, Bitcoin’s volatility has recently begun to converge with that of the S&P 500, reflecting a shifting perception of crypto risk within institutional portfolios.

Currently, the key variables driving market sentiment are the trajectory of the trade war and policy responses to its economic fallout. While some resolution is expected over time, the path forward will likely involve near-term economic slowdown and mounting employment pressures. Against this backdrop, market expectations for four rate cuts this year have risen to 56%. Should monetary easing materialize, crypto assets are well-positioned to be among the earliest beneficiaries. In summary, while volatility and risk remain defining features of the crypto market, these same conditions often present the most compelling opportunities. Navigating this environment requires greater patience and sharper conviction as investors await more favourable entry points.