Trump's $2000 "Christmas gift": What is behind the crypto market's excitement?

Trump recently announced that $2000 cash bonuses would be distributed to low- and middle-income Americans, claiming that the funds come from import tariff revenue. As soon as the news broke, the crypto market instantly became restless: BTC rose 1.75%, ETH rose 3.32%, and Privacy Coins Zcash and Monero even surged by double digits.

The logic of the market reaction is very simple: history repeats itself. During the stimulus checks in the 2020 pandemic, the U.S. government directly injected money, activating an epic bull market for Bitcoin that rose from $4000 to $69000. Now, with a similar script unfolding, investors naturally expect “history to repeat itself.”

But this time there is a key detail that everyone has overlooked—what is the real source of this money?

What is in the gift box?

On the surface, Trump wants to use $19.5 billion in tariff revenue to distribute dividends. However, compared to the $37 trillion national debt of the United States, this amount is hardly a drop in the bucket. Even more disheartening is that this policy has yet to be approved by Congress, and the Supreme Court is still reviewing the legality of the tariffs. According to data from the prediction market Polymarket, 73% of traders are betting that this policy will ultimately be overturned by the judiciary.

In other words, the market is currently celebrating a promise that has not yet been officially approved, with unclear funding sources and missing execution details.

Short-term Stimulus vs Long-term Cost

Even if the policy is really implemented, the consequences will be very tricky:

Inflation Pressure Intensifies: Tariffs raise the cost of imported goods → merchants pass it on to consumers → cash bonuses stimulate consumption → supply-side pressure adds to demand expansion → inflation spirals out of control. Economists warn that this is akin to stepping on the gas and the brake at the same time, ultimately leading to “engine overheating”.

The Federal Reserve is forced to raise interest rates: If inflation data worsens, the Fed will tighten liquidity to combat it. When money is tight, high-risk assets like encryption are the first to be hit.

Geopolitical Risks Escalate: If the trade war reignites, global supply chains will be disrupted (especially chips and mining equipment), leading to a sharp rise in crypto mining costs.

What is the market betting on

Essentially, the crypto market is now betting not on whether policies will be implemented, but rather on whether expectations themselves can drive up asset prices. This mentality was particularly evident at the end of 2020 – regardless of whether the money actually materializes, as long as the market believes that money will come in, funds will rush to get ahead.

But history also teaches us: the last person to leave the banquet pays the bill.

For retail investors, this round of rise may be a short-term emotion-driven rebound rather than a fundamentally driven bull market. There are still significant downward risks before the policies are truly implemented and inflation data stabilizes.

Key Question: Are you buying into expected opportunities, or are you being driven by FOMO to get in? The answer will determine how much you can earn this time, or how much you might lose.