The prospect of "Trump's control over the Federal Reserve" (Trump Fed takeover) has quickly become a major economic theme for 2026, with some traders arguing that markets are still underestimating how radical this shift could be for global liquidity – and thus for the cryptocurrency market.
The macroeconomic commentator plur daddy states clearly via the "X" platform: "The markets not pricing in the possibility of Trump's control over the Federal Reserve is my core theme that I will focus on as we enter 2026 (which is why I am betting on gold). It's a massive shift: the larger and clearer the stimulus, the harder it is to price correctly in the markets."
Former Fed trader Joseph Wang, known as "Fed Guy," echoes this concern from within the system, warning: "Markets are underestimating the possibility of a 'Trump-led Federal Reserve.' The administration is showing skill and determination to lower interest rates. This could lead to a blow-off top in stocks, as implied volatility still suggests that speculation has room to run."
Trump's control over the Federal Reserve is not yet priced in.
This determination clashes with the bond market, which appears to resist via the term premium. "Plur" highlights the spread between 12-month treasury bonds and 10-year treasury bonds as a clear measure of this tension. He notes that the spread "peaked right before the inauguration based on the public sentiment that 'Trump will manage it hotly' (will launch the stimulus)," then "collapsed with the pricing of tariffs and (currency) Dogecoin." The spread reached a bottom near tariff lows and "has now returned to its highest levels," a pattern he reads as an expansion in the term premium as a "form of protest against [Kevin] Hassett," who is presumed to be Trump's pick for Federal Reserve chair.
Against this backdrop, the administration still has powerful tools to pressure the term premium without officially announcing quantitative easing (QE). "Plur" outlines three mechanisms:
* Lifting banking restrictions: allowing banks – and indeed pressuring them – to hold more treasury bonds, thereby enhancing structural demand for government securities.
* Reducing the weighted average maturity of treasury bonds: by shifting debt issuance "to short-term bonds instead of long-term bonds," reducing the time frame that the market has to absorb.
* Specifically for mortgages: "pressuring government-sponsored enterprises (GSEs) to buy mortgage-backed securities (MBS)," narrowing spreads in the mortgage market and transferring the easing policy to the housing market even if the official interest rate moves slowly.
He argues that "all of this is considered very bullish for risks in general, but it will take time to show its effects."
Currently, the environment remains uncomfortable for risky directional bets, including cryptocurrencies. "Meanwhile, the market has been volatile and difficult across the board. Equity indices have risen slowly, but the fundamental rotations have been tough to navigate. Quantitative tightening (QT) has ended, but liquidity remains relatively weak, and as we head toward the end of the year, that doesn't help." He concludes, "Better times ahead."
The bullish shift is on its timeline with the start of the new year. "In the new year, financial easing will expand with the implementation of the OBBBA law (by $10-15 billion monthly). At the same time, we have a macroeconomic team expecting the Federal Reserve to repurchase short-term treasury bonds worth $20-45 billion monthly, starting January 1st."
This combination would alleviate visible pressures in financial markets directly: "This would go a long way toward easing current liquidity issues... This is not classic quantitative easing in that it absorbs a very short duration from the private sector, and its primary effect is to expand bank reserves. This is still bullish as bank reserves are tight right now, which is linked to repo liquidity issues."
Will the cryptocurrency market rise again?
On this basis, "Plur" expects the macroeconomy in 2026 to be "better than in the second half of 2025, and perhaps more in line with parts of 2024." His expression of the bet is clear: "This should be enough for strong gold performance given the angle of Federal Reserve control, along with the continued rise in stocks and selected commodities."
However, for Bitcoin and the broader cryptocurrency market, his stance is notably more cautious. "For Bitcoin, it's hard to say. My base case remains a frustrating period of volatility and re-accumulation." While improved liquidity should be "favorable for Bitcoin," he questions whether there will be a "material shift in the supply/demand imbalances we've been seeing," concluding with, "I'll continue to monitor it for now."
In other words, the bet on "the Federal Reserve under Trump" is already driving high cross bets in gold, stocks, and commodities. Cryptocurrencies would benefit indirectly from the easing of reserves and declining term premium, but within this framework, the main constraint is no longer just total liquidity, but whether new demand is strong enough to meet the increasingly inelastic supply in the cryptocurrency market.
