Crypto market crashes as odds of Trump’s $2,000 stimulus check drop

The recent crypto market crash continued today, Nov. 16, with Bitcoin moving below $95,000. Other top coins like Ethereum, XRP, Solana, and Tron also continued their strong plunge. The market cap of all tokens dropped to $3.28 trillion.

Crypto market crash continues as stimulus check odds fall

One potential catalyst for the ongoing crypto market crash is that the odds of Donald Trump’s $2,000 stumulus check crashed on Polymarket. Data shows that odds of the tariff stimulus happening this year dropped to just 5%.

This probability accelerated after Donald Trump confirmed that he hopes that the checks will start going out in 2026. In another statement, Scott Bessent, Treasury Secretary, said that the stimulus checks will need congressional support. 

Odds of the bill passing in the House of Representatives and the Senate are almost zero. For one, Republicans have a thin majority in the House, while such a bill will need Democrats in the Senate. 

Legislators will likely reject the bill for three main reasons. First, a $2,000 check sent to all taxpayers will cost about $600 billion, much higher than the estimated $300 billion in tariff revenue.

Second, history shows that substantial stimulus packages help to fuel inflation. Indeed, one reason why inflation has remained at an elevated level is that Trump and Joe Biden sent billions of dollars to Americans during the pandemic. 

Third, some legislators believe that Trump’s tariff revenue should go towards reducing the ballooning $38 billion public debt. Independent agencies believe that the tariff revenue will help to reduce the debt growth by about $4 trillion in a decade. 

Meanwhile, it is also worth noting that past promises of stimulus checks by Trump have not worked out well. For example, he promised DOGE dividend checks earlier this year. These funds would come from the savings championed by Elon Musk, who was the head of the Department of Government Efficiency (DOGE).

Stimulus checks would be bullish for the crypto market

We believe that stimulus checks would be bullish for the crypto market as they would lead to more money supply in the economy. While most of these funds would go to the stock market, others would flow to cryptocurrencies like Bitcoin and Ethereum. 

The stimulus check would come at a time when the Federal Reserve is cutting interest rates. While there are doubts about a cut in the next meeting, the expectation is that the Fed will deliver more cuts in 2026 as Trump replaces Jerome Powell as the Chair. 

A combination of cuts and growing money supply would lead to a stock and crypto market rally. 

Bitcoin price forms death cross as Fear and Greed Index falls

Meanwhile, the crypto market crash happened as the Fear and Greed Index dropped to the extreme fear zone of 18. It is common for crypto tokens to plunge when the index drops to the fear zone, as this leads to panic selling.

Meanwhile, the Bitcoin price has formed a death cross pattern for the first time in over a year. This pattern is characterized by a 50-day moving average crossing the 200-day EMA. in most cases, it normally leads to more downside, and investors anticipate more pain in the crypto market.

There are other reasons for the ongoing crypto market crash, including the falling open interest, flatlined funding rate, and the ongoing outflows of stablecoins from exchanges. The latter is a sign that there is no new money coming to the industry, which is normally a bullish aspect.