Trump's recent move is definitely a TACO, as he just mentioned considering ending military operations against Iran. This is exactly the same tactic he used with tariffs, and Bitcoin's price has also fluctuated in tandem with his attitude, it's simply perfect timing.
First, let's talk about what TACO means: Trump Always Chickens Out. In simple terms, it means "Trump always backs down at the last minute." He is known for making tough statements and adopting a hardline stance, but once he faces actual pressure, he backs down. This has been clearly demonstrated in the recent U.S.-Iran conflict. Just a few days ago, he said there was no time limit on military operations against Iran, and reports even suggested the U.S. would strike for at least 100 days. However, he turned around and told Israeli media that operations would end at the "appropriate time," completely omitting any mention of Israel's independent military action, a classic case of talking tough but actually backing down.
As for Bitcoin's price movement, it has completely followed Trump's attitude and the U.S.-Iran situation like a rollercoaster. On March 8, when Trump announced he would continue military action and tensions escalated, the crypto market panicked. Bitcoin fell below the $70,000 mark, with over 88,000 people getting liquidated, losing $420 million. At that time, market risk aversion was at its peak, as everyone feared that escalating conflict would impact the global economy.
In fact, this wave of volatility had been hinted at earlier. In early March, there were signs of easing conflict from Trump's side, coupled with his public support for cryptocurrency legislation, which led to a rebound in Bitcoin, rising over 6% in a day and briefly surpassing $74,000. Other tokens like Ethereum also increased. The market was already betting that Trump would back down like he did with tariffs. Even though there were fluctuations in the situation causing a temporary halt in Bitcoin's rise, it still held up better than gold, indicating that investors had already anticipated his TACO behavior.
Ultimately, Trump's backing down this time was due to the pressure from both inside and outside. Citizens in over 50 cities in the U.S. opposed the war, criticizing the daily expenditure of $1 billion on military actions, while Iran remained defiant and continued to retaliate vigorously. He simply couldn't afford to prolong the conflict. This latest fluctuation in Bitcoin also reaffirms that the TACO effect is not only applicable in the stock and foreign exchange markets; the cryptocurrency market reacts to his policy reversals as well. Whenever he shows signs of backing down, market risk aversion decreases, and risk assets like Bitcoin rebound. $BTC
