What $10,000 Invested on Trump’s Inauguration Day Reveals About Markets
An investment of $10,000 in physical gold on January 20, 2017, would have grown to about $13,000 by early 2021, while the same amount placed in Bitcoin would have surged to over $60,000. Yet, during certain intervals, precious metals notably outperformed cryptocurrencies, reflecting shifting investor preferences amid geopolitical uncertainty and regulatory developments. Understanding this dynamic sheds light on how risk perceptions and regulatory environments influence asset class resilience over time.
What happened
On January 20, 2017—the day Donald Trump was inaugurated as U.S. president—a $10,000 investment in physical gold, represented by the SPDR Gold Shares ETF (GLD), appreciated steadily to approximately $13,000 by early 2021. In contrast, a $10,000 investment in Bitcoin on the same date experienced significantly higher volatility but ultimately grew to above $60,000 over the same period, according to data compiled by Cryptopotato.
Between 2017 and mid-2019, however, precious metals such as gold and silver outperformed cryptocurrencies during periods marked by heightened geopolitical tensions and regulatory uncertainties. This pattern is supported by Bloomberg’s 2019 analysis highlighting gold’s relative strength amid crypto market volatility. ETF inflows into GLD and the iShares Silver Trust (SLV) corroborate this trend, with consistent increases in investor demand during episodes of geopolitical risk, as documented in SEC filings and disclosures from ETF issuers.
Meanwhile, the cryptocurrency sector faced intensifying regulatory scrutiny starting in 2017, including enforcement actions by the U.S. Securities and Exchange Commission (SEC) and global regulatory crackdowns. These interventions contributed to elevated volatility and increased perceptions of risk within crypto markets. Official SEC statements and Financial Times coverage from 2018 and 2019 confirm the tightening regulatory environment.
Analysts have interpreted these developments in two main ways. Some view the outperformance of precious metals during certain intervals as evidence that investors shifted toward traditional safe-haven assets amid geopolitical uncertainty and regulatory clampdowns on cryptocurrencies. Others argue that while cryptocurrencies offer superior returns over the long term, their pronounced volatility and regulatory challenges prompt some investors to prefer the relative stability and clearer regulatory framework of precious metals ETFs, especially during periods of market stress.
Academic research, such as the 2021 Journal of Investment Strategies, suggests an evolving relationship: geopolitical uncertainty tends to increase demand for traditional safe havens, while regulatory environments shape the risk profiles and resilience of emerging asset classes like cryptocurrencies.
Why this matters
The observed performance divergence between precious metals and cryptocurrencies since Trump’s inauguration highlights important structural shifts in investor behavior and market dynamics. First, it underscores how geopolitical uncertainty continues to reinforce the role of traditional safe-haven assets like gold and silver, which benefit from established regulatory frameworks and investor familiarity.
Second, the data reveals that regulatory developments materially affect cryptocurrency market volatility and risk perceptions, influencing investor allocation decisions. The increased regulatory scrutiny from 2017 onwards has not diminished the long-term growth potential of cryptocurrencies but has introduced episodic volatility that can drive short- to medium-term investor rotations into more stable assets.
Third, this dynamic illustrates a broader tension in financial markets: emerging asset classes with high return potential and technological innovation face challenges in achieving the same level of institutional trust and stability as long-established assets. The relative resilience of precious metals during periods of heightened uncertainty suggests that regulatory clarity and geopolitical factors remain key determinants of asset class performance.
Finally, understanding these patterns is critical for policymakers and market participants as the institutionalization of cryptocurrencies evolves. It raises questions about how regulatory frameworks might adapt to balance innovation with investor protection and market stability, and how traditional safe havens will compete or coexist with digital assets in future risk environments.
What remains unclear
Despite these insights, several important questions remain unresolved. The extent to which precious metals’ outperformance during certain intervals reflects pure investor risk aversion versus fundamental macroeconomic factors such as inflation or interest rates is not clearly disentangled in the available data.
Additionally, the differential impact of regulatory developments on institutional versus retail investors in cryptocurrencies is not well documented. Detailed, investor-level data on asset allocation shifts between precious metals and cryptocurrencies post-2017 is not publicly available, limiting understanding of who is driving these flows.
Moreover, the sustainability of precious metals’ resilience in the face of growing cryptocurrency adoption and institutionalization is uncertain. It is unclear how factors such as increasing technological adoption, liquidity conditions, and evolving market infrastructure will influence the relative performance and risk profiles of these asset classes going forward.
Finally, regulatory impact assessments remain largely qualitative, lacking standardized metrics to quantify their direct effects on asset class resilience, making it difficult to isolate regulatory influence from other market drivers.
What to watch next
- Ongoing regulatory decisions and enforcement actions by bodies such as the SEC that could further clarify or alter the risk landscape for cryptocurrencies.
- ETF inflow and outflow data for precious metals funds (GLD, SLV) during future geopolitical events to assess shifts in safe-haven demand.
- Emerging data on institutional investor behavior in cryptocurrencies versus precious metals, which could illuminate allocation trends and risk tolerance.
- Macroeconomic indicators such as inflation rates and interest rate policies that may influence the fundamental attractiveness of precious metals relative to digital assets.
- Developments in cryptocurrency market infrastructure and regulatory frameworks that may affect volatility and investor confidence.
The interplay between geopolitical uncertainty, regulatory environments, and asset class resilience remains a critical but complex area of market analysis. While precious metals have demonstrated steady safe-haven appeal during periods of tension, cryptocurrencies have delivered outsized long-term returns despite volatility and regulatory challenges. The evolution of these dynamics will continue to shape investor risk perceptions and market structures in the years ahead.
Source: https://cryptopotato.com/the-10000-trump-trade-what-actually-made-money-since-inauguration-day/. This article is based on verified research material available at the time of writing. Where information is limited or unavailable, this is stated explicitly.