1. Trump's card: The confidence to control the game.
In negotiations with Zelensky, Trump once bluntly stated, 'You have no cards left!' This phrase not only showcases his strong negotiating position but also implies that he holds plenty of chips. Tariff policies, tax cut promises, energy independence strategies, and even political pressure on the Fed are all cards in his hand. Assuming Trump has 'three upward cards and one downward card' (or 'two up, two down'), how would he play them? The answer is obvious: the downward card comes first, the upward card comes later, especially in the fourth year (2028), which must rise to secure re-election or a dignified exit.
As soon as Trump took office, he unleashed the 'big move' of tariffs, not with the intention of collapsing the global economy, but to quickly burst the bubble and pave the way for reviving the US economy. He may deliberately make 2025-2026 the 'moment of despair' for the market, forcing out recession signals through short-term pain, and then in 2027-2028, using tax cuts, infrastructure, and possible monetary easing to turn things around, crafting the image of an 'economic savior.' This 'first break then build' strategy aligns with his style and voter expectations for 'results-oriented' outcomes.
2. Why is it better to place the upward card later?
The logic of concentrating the upward card in the later stages is based on three points, simple yet profound:
Voter's short-term memory: Psychological studies show that people's impressions of recent events are much stronger than those of earlier ones. The economic performance in an election year (such as stock market rises, employment improvements) directly determines the allocation of votes. Data shows that the success rate of US presidents seeking re-election is highly correlated with GDP growth and unemployment rate in the fourth year.
The narrative's dominance: The subsequent rise will allow Trump to claim, 'I brought the economy back,' easily covering up the early lows and building an inspiring story of rising from the bottom.
The opponent's dilemma: If the economy is strong in the fourth year, the opposition will find it difficult to find points of attack, and Trump's political capital will be maximized.
Of course, in reality, he cannot completely control the 'deck order' — Fed policies, global economic fluctuations, and unexpected events can disrupt the rhythm. But strategically, he would prefer 2025-2026 to bear the downward pressure, then concentrate on releasing upward momentum in 2027-2028.
3. Realistic considerations: Complex games.
Trump's situation is more complex than theoretical models suggest. He cannot control the scene as precisely as playing poker: the Fed's independence, the backlash from global supply chains, and even domestic political resistance could lead to him playing his 'cards' incorrectly. However, his style has always been 'first bitter then sweet' — actively igniting short-term crises through tariff wars or debt adjustments, and then recovering lost ground with tax cuts and stimulus policies. This high-risk approach may further pressure the market in 2025 but also lays the groundwork for a later rebound.
4. What should we do? Opportunities in despair.
The current market has entered the 'moment of despair': on-chain assets collapse, secondary altcoins go to zero, core assets (US stocks, BTC) are on the brink. Trump's radical policies have undoubtedly exacerbated this panic, but his real goal is to reshape the US economy, not to destroy the global market. For us ordinary investors, this is both a challenge and an opportunity.
Short-term strategy: Be patient and observe, keep cash. The market has not yet bottomed out, liquidity contraction continues, and rash bottom-fishing may lead to being trapped.
Long-term perspective: Prepare for a rebound. Trump's 'upward card' and the Fed's 'tap' will eventually open; the key is to endure the current panic.
5. The desperate logic of the current market.
The collapse of the market has its inherent logic:
Expectation reversal: In the past two years, the market has rushed to anticipate the Fed's easing (rate cuts + balance sheet expansion), with US stocks and BTC soaring in 2023-2024. However, as the easing expectations approach, the positive news has not brought new surprises, and investors have shifted focus to recession, inflation, and debt risks. Funds are withdrawing, liquidity expectations are deteriorating, just like 'good news turns into cold water.'
Asset chain reaction: On-chain assets (DeFi, NFT) and altcoins collapse first, signaling liquidity contraction. Now the pressure is being transmitted to US stocks and BTC — the correlation between BTC and S&P 500 in a bear market is as high as above 0.8, and if US stocks continue to decline, BTC will find it hard to remain unaffected.
Self-fulfilling expectations: Market participants sell assets and hoard cash when 'gambling on recession,' further draining liquidity and accelerating price declines. Panic selling in 1929 and 2008 proves that expectations are not only results but also causes.
6. The timing of opening the 'tap.'
When can we get through this round of 'gambling recession'? The answer lies in the hands of the Fed. They are 'watching the market collapse as planned,' waiting for three key signals:
Economic deterioration: Unemployment rises to 5%+, PMI falls below 45, consumption shrinks.
Market panic: VIX soars above 40, US stocks fall into bear market (another 20% drop), and the yield curve inversion intensifies.
Easing inflation: CPI falls below 3% (currently around 3.5%), creating space for rate cuts.
As of April 8, 2025, US stocks have evaporated $6.5 trillion, and BTC has fallen over 30% from its peak; panic is brewing. However, the unemployment rate has not spiraled out of control, and inflation is still untamed; the Fed may continue to 'painfully observe.' I expect the 'moment of despair' to last until the second half of 2025 unless a catalyst appears:
US stocks could fall another 15-20%, triggering systemic risks (such as a banking crisis).
Unexpected drop in inflation, the Fed cuts rates ahead of time.
Trump pressures the Fed for easing (he has repeatedly criticized Powell and may use political means).
When will the real bull market arrive?
The liquidity valve is not open; the real bull market has not yet started. Historical experience indicates that the transition from Fed tightening to easing is the starting point of a bull market:
In 2009, QE1 rescued the market, and the S&P 500 rebounded.
In 2020, with unlimited QE, BTC rose from 3800 to over 60,000. This time, when recession expectations are 'fully priced in' (S&P falls below 4000, BTC below 40,000), the Fed will cut rates + expand the balance sheet, and the liquidity flood will reignite the market.
Time window prediction.
Pessimistic scenario: Recession intensifies (e.g., tariff war spirals out of control), the market bottoms out in Q3 2025, the Fed eases at year-end, and the bull market starts in early 2026.
Optimistic scenario: Inflation quickly recedes, the Fed cuts rates mid-year, the market rebounds in Q4 2025, and the bull market arrives early.
Conclusion.
Everything now is part of the plan by those who control the 'tap' — they are forcing recession signals out of market pain to pave the way for easing. The key to getting through this moment is 'bad enough data' and 'low enough asset prices.' I tend to believe that the second half of 2025 will be a turning point, when 'things are gonna get a lot better.' For us, patience is the best strategy — opportunities lie at the end of panic.