Trump's Davos speech begins in 2 hours, and the market holds its breath amid uncertainty

Tonight at 21:30 Beijing time, Donald Trump will deliver a special speech at the World Economic Forum. This speech is considered “a word of nine hinges” for the current crypto market—over the past two days, the market has experienced intense volatility due to a series of policy signals from him, from tariff threats to changes in the Federal Reserve Chair nomination, all profoundly affecting investors’ risk appetite.

Why is the market so sensitive

In the past week, the crypto market has gone through an “emotional rollercoaster.” Bitcoin surged to $97,000 last week but quickly retreated on the morning of January 19, briefly falling below $92,000; Ethereum lost the $3,200 support, and Solana dropped below $140. According to Coinglass data, approximately $593 million in liquidations occurred across the network in the past 4 hours, with longs accounting for nearly 90%, indicating market sentiment is under significant pressure.

The triggers for this “Black Monday” are almost all related to Trump’s policy uncertainty:

• Renewed disputes over Greenland and tariff friction between Europe and the US, with Trump threatening tariffs on eight European countries
• Rising expectations that the new Federal Reserve Chair will shift from dovish to hawkish, with the probability of Kevin W. becoming the next Fed Chair soaring to about 60%
• The crypto-friendly bill CLARITY facing obstacles in the Senate

The market has learned Trump’s “套路”

Interestingly, the market’s response to Trump’s policy fluctuations has become increasingly mature. Analysis shows that his common pattern is:

1. Weekend tough talk—issuing threats of tariffs or other policies
2. Market sentiment initially crashes, then calms—investors panic sell first, then think calmly
3. Government officials come out to reassure—alleviating market worries
4. Ultimately, an agreement is reached—tariffs are usually canceled on or just before the effective date

In this pattern, smart money often chooses to bottom fish in the second phase. However, analysts also point out that negotiations may involve multiple rounds of back-and-forth, and the final outcome remains uncertain.

Subtle changes in the crypto market

Notably, latest data from Matrixport shows that despite Trump once again threatening tariffs, the implied volatility of Bitcoin and Ethereum has only risen slightly. Since mid-November, overall implied volatility has actually decreased significantly, with a cumulative drop of about 18-25 volatility points over the past two months. This indicates that mature investors are adjusting their strategies—no longer blindly chasing gains, but instead enhancing returns through selling call options within certain ranges.

Meanwhile, Yat Siu, co-founder of Animoca Brands, stated that the “Trump moment” in the crypto industry has ended, and the next phase will be driven by real users, solid infrastructure, and regulation. This view reflects a market shift from policy speculation back to fundamentals.

Market expectations for tonight’s speech

Trump’s speech at Davos will address several market concerns:

• Whether his stance on European tariffs will soften
• His views on the independence of the Federal Reserve
• His policy stance on cryptocurrencies and digital assets
• The overall direction of economic policies in 2026

The market consensus is: if he signals easing, risk assets (including cryptocurrencies) may rebound; if he remains tough, short-term volatility could intensify.

Summary

Trump’s upcoming speech at Davos has become a “stress test” for the market. The recent two days of volatility show that policy uncertainty still has a huge impact on risk appetite. However, from the changes in options markets and investor strategies, the market is learning how to cope with this volatility—no longer blindly chasing gains or losses, but seeking structured trading opportunities amid uncertainty. Regardless of the content of his speech, the market is prepared. The key is to stay alert and not be swayed by short-term emotions.