Trading Trump is not for the faint of heart
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Illustration: Lindsey Bailey/Axios
Seven weeks into the second Trump administration, one thing has become clear: It's better to be a trader than an investor.
Why it matters: Donald Trump is by far the most unpredictable president in living memory, which means he's by far the most likely to do something unexpected that moves markets.
Driving the news: When Trump was asked about recession risks over the weekend, he said, "I hate to predict things like that. There is a period of transition," adding, "It takes a little time, but I think it should be great for us, I mean I think it should be great."
- The stock market, which was looking for reassurance that Trump is trying to avoid a recession, promptly barfed, with Trump-adjacent stocks like Tesla taking the biggest hits.
- "Markets do not like uncertainty and the administration is creating a lot of confusion. This is a Trumpster fire," Franklin Templeton Institute strategist Chris Galipeau said in market commentary.
- The upshot: Anybody who's been on the short side of the "Trump trade" since the inauguration has made spectacular profits.
Flashback: On March 2, Trump announced the impending creation of a "crypto strategic reserve" that would include Cardano, a coin with a market capitalization of about $24 billion. (Bitcoin's market value, by contrast, is some $1.6 trillion.)
- The price of Cardano immediately spiked by some 70%. It then slumped from $1.14 to $0.79 — a drop of over 30% — in less than 24 hours, as the market realized Cardano was never going to be part of any strategic reserve. (Instead it was shunted into a "digital asset stockpile.")
Follow the money: The volatility in the crypto market was catnip for traders.
- The price action in bitcoin alone netted one trader with astonishingly good timing a profit of $6.8 million in a matter of hours.
What they're saying: Crypto high-flyer Anthony Pompliano, in a letter to investors, said Trump's move to create a crypto strategic reserve represented "a random smattering of speculative tools that will enrich the insiders and creators of these coins at the expense of the U.S. taxpayer," Reuters reported.
For the record: The White House declined to comment.
The bottom line: Trump regularly takes both sides of many issues. He has "a dizzying rhetorical tactic of shifting positions like quicksand," according a news analysis by the New York Times.
