Market Forces to Watch in 2025

• Government Spending: The U.S. and China are expected to increase government spending in 2025, likely increasing global liquidity conditions. Historically, the crypto market has often moved in tandem with global liquidity.
• Trump and tariffs: Trump has applied tariffs to many countries. If he softens these policies during future talks, it may help the market and lower uncertainty.
• Peace in Ukraine: Progress towards peace in Ukraine could lower global uncertainty. It may also improve trade conditions and boost market sentiment, including in crypto markets.

Global Monetary Supply Increase

Many people expect that the U.S. and China will spend more money in 2025. This spending will help them reach their economic goals. For the U.S., maintaining economic growth and avoiding stagnation will likely drive increased government spending. With rising concerns over slowing economic momentum, and the fallout from Trump's Tariffs, policymakers may look to inject more capital into the economy to stimulate demand and safeguard against recessionary risks.

China, on the other hand, is facing structural challenges, particularly in its property sector and broader domestic consumption. To counter these headwinds, Chinese policymakers may ramp up stimulus efforts, including investment in infrastructure and incentives for high-tech industries.

Note: Predicted increase in global money supply and its historic correlation with Bitcoin’s price

As governments are likely to borrow to fund increased spending, this may have an impact on increasing the overall global money supply (depicted above as M2 money supply). Historically, an increase in the global money supply has correlated with rising asset prices, as excess capital often flows into investments like stocks and cryptocurrencies. This surge in liquidity tends to encourage greater risk-taking, making crypto markets a likely beneficiary if fiscal spending accelerates in 2025.

Interest Rate Cutting Prospects

The U.S. Federal Reserve was looking toward cutting interest rates, this is another significant macro factor to watch. Lower interest rates reduce the cost of borrowing, making it cheaper for businesses and individuals to access capital. This however looks less likely due to depends the markets reaction to Trumps Tariffs.

Predictions of U.S. interest rate cuts for 2025 (before Trumps Tariffs)

Trump’s Tariffs

U.S. trade policy under President Donald Trump is another key variable in 2025 for markets. Trump's current view shows a tougher approach. He plans to apply tariffs to many countries in early April. This has resulted in raised risk and uncertainty in global markets.

That said, any future possibility of lowering or eliminating tariffs as negotiations progress may lift overall market sentiment. This could encourage greater risk-taking in speculative markets like crypto, although it is impossible to predict.

“Other countries have used tariffs against us for decades and now it’s our turn to start using them against those other countries.”
– U.S. President Donald Trump (Mar. 4, 2025)

Peace Prospects In Ukraine

Global markets favour stability over uncertainty. The ongoing conflict in Ukraine has been a major source of global tension, affecting energy prices, supply chains, and broader investor confidence. At the time of writing, recent discussions about potential ceasefire agreements could mark the early stages of conflict resolution. However as time has gone on, this does seem increasingly unlikely.

If a peace deal is struck, it’d presumably reduce geopolitical uncertainty and reopen trade routes between Europe, Russia, and Asia. This would likely improve commodity flows and ease trade disruptions, creating a more stable backdrop for global markets and less uncertainty in general.

Conclusion

A variety of macroeconomic forces are likely to influence market conditions in 2025. Increased fiscal spending, changes to the interest rate, US, Ukraine, and Russia’s negotiations, and shifts in U.S. trade policy could collectively act as major catalysts for growth.

Importantly, Trump is likely to measure his success by the performance of financial markets. Now economic conditions have weakened, there may be strong incentives for policy shifts to stimulate growth and restore market momentum.

For crypto markets, these evolving conditions present both risks and opportunities. While downturns can feel unsettling, these conditions could create fertile ground for renewed growth.