Let The Games Begin!
Trump's First Week in Office (5-min read)
As expected, Trump’s return to the White House has started with a bang. First, he began with new tariff announcements which are stirring the pot in international trade due to their implications for global markets, inflation, and America’s economic positioning on the world stage.
Secondly, in a move that’s both bold and controversial, the Trump family has entered the cryptocurrency space with their own meme coins, $TRUMP and $MELANIA. While this might sound like a joke at first, the financial and regulatory impact of such high-profile involvement in crypto can’t be ignored. Could there be an ulterior motive behind this?
There’s a lot going on right now, so let’s quickly unpack everything.
Trump’s Tariffs: Trade Wars, Round Two
Firstly, what is a tariff?
A tariff is a tax that a government places on goods or services imported from another country. It makes those imported items more expensive, usually to encourage people to buy locally made products or to protect local industries from foreign competition.
For example, if the U.S. places a tariff on cars made in another country, it means those cars will cost more when sold in the U.S., giving American-made cars a price advantage.
During his election campaign, Trump was very loud about imposing tariffs and in his initial days of the second term, President Trump has followed through and reintroduced tariffs targeting key trading partners such as Canada, Mexico, and China.
So what is the impact of these tariffs?
Global Markets: Tariffs disrupt global supply chains, making it more expensive for companies to source materials and products. This uncertainty can lead to increased market volatility as businesses and investors react. Companies relying on imports might see higher costs, which can hurt their profits and, by extension, their stock prices.
US Inflation: As tariffs act like a tax on imported goods, when companies face higher import costs, they often pass those costs on to consumers. So, expect higher prices on items like electronics, cars, and even groceries. Inflation, which is already sitting at 2.7%, could edge up further, putting more pressure on the Federal Reserve’s monetary policy.
At a time where interest rates are already high and investors are looking towards returning to an environment where the Fed are reducing rates (to help with stock valuations), these tariffs aren’t very welcomed.
Bargaining Power: These tariffs are Trump’s way of trying to force better trade deals. While it’s a strong-arm tactic, there’s always the risk of retaliation. Other countries could impose their own tariffs on U.S. goods, hurting American exporters and potentially escalating into a full-blown trade war.
In my opinion, a full-blown trade war is unlikely and Trump knows this. Hence his confidence in using these tariffs as a negotiation tactic to bend other countries to his own will.
Tariffs are a double-edged sword. While they can strengthen bargaining power in trade negotiations, they can also strain global economic relations and increase costs for both businesses and consumers. If you’re invested in sectors like manufacturing, tech, or agriculture, keep an eye on this—it could directly impact those markets.
Trump Meme Coins: $TRUMP and $MELANIA, Really?
On the weekend before his inauguration, Trump pulled a very surprising move (even for his own standards), by launching his own meme cryptocurrency - $TRUMP. Which was then shortly followed by the first lady’s own coin - $MELANIA. In true Trump fashion, this sent the crypto markets wild as these coins gained massive attention almost instantly, with their values spiking and falling as the hype played out.
Why does this matter?
Crypto Markets: These coins created a surge in speculation, with traders piling in to try and capitalise on the hype. While some made quick profits, others still see this as a very risky play that highlights how volatile and hype-driven the crypto space can be. Even the legacy coins like Bitcoin, Ethereum and XRP were impacted as the Trump coins took a majority of the market mindshare throughout that weekend, seeing large amounts of volume flowing out of every other coin.
To me, the large drop in the markets was a clear case of investors displaying the “shiny-new-object syndrome”. Most wanted to chase a quick flip and although you’ll hear the stories of the few who made millions, the reality is that most people ended up losing money. As I always say, when looking to dip your toe into crypto, you should focus on utility and not hype.
Regulatory Scrutiny: High-profile launches like this don’t go unnoticed by regulators. Questions are being raised about whether there’s a conflict of interest or potential manipulation, especially with Trump being a sitting president. This could lead to stricter rules for the crypto industry as a whole, which might impact how accessible and attractive crypto investments are in the future. Could this be a positive or a negative for the crypto space? Only time will tell.
Pro-Crypto Stance: By stepping into the crypto space, Trump is doubling down on his image as a crypto-friendly president. This could encourage more innovation and adoption of digital assets in the U.S., but it also raises concerns about ethical boundaries and whether this move prioritises personal interests over broader economic stability.
Although the idea of meme coins is still uncertain to most, I personally lean more towards the stance of Trump using this as a signpost to the market and investors that he’s taking crypto seriously (for now). Furthermore, following the release of these coins, Trump went on to sign an executive order titled "Strengthening American Leadership in Digital Financial Technology," which establishes a working group to develop federal regulations for digital assets and explores creating a national digital-asset stockpile - a huge milestone for the cryptocurrencies space.
The Trump family’s meme coins are both a spectacle and a signal. They highlight the growing mainstream appeal of cryptocurrencies but also highlight the need for responsible investing. If you’re considering diving into crypto, focus on long-term value rather than chasing the next trendy coin. Nonetheless, don’t let the short-term panic and volatility remove your attention from the bigger picture. Crypto is here to stay and things are being put in place to make it a safer and more stable place to invest - the opportunities are just getting started.
I hope you’ve learned something new, and if you have any questions or want anything to be clarified, please leave a comment below and make sure to follow us on all social media pages.
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