Gold surges, Bitcoin rallies, stocks down since Trump's electoral win — What’s driving the chaos?

Pro-crypto Donald Trump won the U.S. presidential election over four months ago, and since then, the period has been characterized by financial market turbulence and global uncertainties surrounding tariffs, geopolitical tensions, and ongoing conflicts in the Middle East and between Ukraine and Russia.

Bitcoin (BTC) has surged over 23% since the Nov. 5 election, reaching an all-time high of over $109K at the end of January. Despite a subsequent 30% decline from its peak, it remains one of the best-performing assets. Strategy (MSTR), often considered a bitcoin proxy, has gained 34%, recovering well under the Trump administration despite previously dropping around 60% from its November highs.

Ethereum's ether token (ETH) has fallen by as much as 18%, alongside disappointing action in the broader crypto market. The Valkyrie Bitcoin Mining ETF has also struggled, dropping almost 30%. Meanwhile, investors have rotated money into BTC, pushing its dominance rate higher by 2% to over 61.

European equities have done well, outshining their U.S. counterparts. The German DAX index is up 20%, and the UK’s FTSE 100 has gained 6%, alongside weaker performances in the U.S. stock market, where the Nasdaq and S&P 500 are both down approximately 2%. A recent report from Bank of America highlights a record drop in U.S. stock allocations. Gold, benefiting from uncertainty, has continued to set new all-time highs, surpassing $3,030—an 11% increase.

The U.S. Dollar Index (DXY), which measures the dollar's strength against a basket of major currencies, remains flat. However, under Trump, the dollar has weakened significantly, providing some relief to risk assets and major currencies such as the Euro and the Great British Pound.

Meanwhile, the U.S. 10-year Treasury yield has slightly declined to 4.2%, a key metric the administration is closely monitoring. Oil prices have plummeted by around 7% as the U.S. maintains its stance on energy dominance to reduce energy costs.

Notably, some of the so-called "Magnificent 7" stocks have struggled, with NVIDIA (NVDA) down 16% and Tesla (TSLA) declining 6%.

Detox underway?

Recent losses on Wall Street and in the crypto market have ignited hopes for the "Trump put," or potential policy support. However, the administration appears willing to endure short-term pain for long-term benefits, believing that this approach will cleanse the markets of the fiscal spending excesses of the Biden era.

This reset is expected to be characterized lower inflation, improved energy security, and a lower 10-year Treasury yield.

"Scott Bessent’s talk of a “detox period” suggests a controlled downturn might be ahead. If that’s the case, Trump’s playbook seems clear: blame the recession on Biden, use tariffs and crypto narratives to manage costs, and push for lower interest rates to fuel tech and AI growth. Short-term pain, long-term gain—that’s the strategy," Gracy Chen, CEO of Bitget, said in an email to CoinDesk this week.

"Regardless, I don't see BTC falling below 70k, possibly 73-78k which is a solid time to enter for any buyers on the fence. In the next 1-2 years, BTC at 200k isn’t as far-fetched as most would think," Chen added.