Along those lines, Trump abruptly backed away from threats to impose tariffs on European nations that stood in opposition of his bid for the semi-autonomous island. Not long before, he also ruled out the use of force during his address in Davos, Switzerland. Markets rebounded following his comments after falling into the red Tuesday amid tariff uncertainty.
The developments had all the making of a “TACO” situation, short for “Trump Always Chickens Out.” The acronym was coined last year in reference to Trump’s habit of announcing massive tariffs as a pressure tactic, only to reverse course once global markets begin to dip.
In a Thursday note, Jasper De Maere, a desk strategist at crypto market maker Wintermute, said Trump’s pivot removed “some immediate geopolitical overhang that was driving the earlier selloff,” but “macro risk remains elevated” despite any stabilization in Bitcoin’s price.
“Bitcoin is acting like a high-beta and risk-on asset, trading very similarly to equities,” Carlos Guzman, a research analyst at crypto trading firm GSR, told Decrypt. “Bitcoin is not acting as a store of value. It’s not yet digital gold in investors’ minds.”
“Seeing participants pull out their support of that bill, I think that just added to the pessimism this week,” GSR’s Guzman said. “There was a lot of optimism.”
