Trump Media's $2B Bitcoin Buy Challenges Halving Cycle Wisdom of BTC Peaking in 2025

"Don't fight the Fed," a market adage says, warning investors from betting against the U.S. Federal Reserve. For crypto traders, it may be time for a new dictum: "Don't fight the President."

On Monday, Trump Media and Technology Group, the social media company owned by President Donald Trump, disclosed a $2 billion investment in bitcoin BTC$67,125.22, with the intention of acquiring more.

The announcement calls for traders to reconsider the possibility of BTC remaining bid through the year-end, potentially invalidating the conventional wisdom that the bull market peaks a year after the halving.

Halving cycle

The Bitcoin blockchain implements reward halving every four years, reducing the amount of BTC paid to miners per block by 50%. The fourth halving, implemented in April last year, decreased rewards to 3.125 BTC. Since then, BTC's price has surged from roughly $65,000 to nearly $120,000.

The bull market is in full swing, but here is the catch. Since its inception, bitcoin's price has tended to follow a predictable rhythm – a four-year cycle centered around halving. Notably, prices tend to surge after halving, peaking 12-18 months after the event and then slipping into a year-long bear market. Past bull runs peaked in December 2013, December 2017 and November 2021.

In other words, if history is a guide, BTC's ongoing bull run could lose momentum before the year's end, paving the way for a prolonged bear market.

This time may be different

The notion that history must repeat itself in Bitcoin's cycles requires reassessment this time due to a key differentiator – the presence of a pro-crypto president.

On one hand, the Trump-linked DJT is actively purchasing coins and adding bullish pressure in the market. On the other hand, the Trump administration is adding to the bullish market sentiment through favorable regulatory reforms, such as the recent GENIUS Stablecoin Act.

Beyond traditional market cycles, Trump Media's multi-billion-dollar Bitcoin bet signals potentially significant bullish macro tailwinds. As pseudonymous observer EndGame Macro highlighted on X, "No one spends $2 billion on an ultra volatile asset unless they’re betting on a shift in the entire liquidity regime."

Given President Donald Trump's repeated public criticisms of Fed Chairman Jerome Powell and high interest rates, this high-profile bitcoin acquisition by the President-linked group likely suggests a clear strategic play: a bet on forthcoming rate cuts and a potential debasement of the U.S. dollar.

Trump has repeatedly criticized the Fed and its Chairman Jerome Powell for keeping interest rates elevated at 4.25%, saying it's costing Americans billions of dollars.

"If they didn’t believe the Fed was going to pivot, either by force or design, then this would be reckless. Because if the Fed holds rates higher for longer and bitcoin corrects 40–60% in a deflationary flush, Trump Media would risk massive mark-to-market losses or even liquidation depending on how this position is structured," EndGame Macro noted.

Fed rate cuts and potential debasement of the dollar could only add to the liquidity in the system, easing financial conditions for continued risk-taking in both traditional and crypto markets.

Goldman expects three rate cuts this year

Strategists at the investment banking giant Goldman Sachs expect the Fed to deliver three-quarter basis-point rate cuts, starting from the September meeting, according to InvestingLive.

The expected easing cycle is contingent on inflation not flaring up again, Goldman noted, adding that the current trends point to a gradual but steady policy pivot to rate cuts.

Read more: Trump Media Discloses $2B Bitcoin Stack