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The trump shockwave: How presidential tenure redefined cross-asset spillovers in cryptocurrency, commodity, and capital markets

Author

Listed:
  • Wei, Yu
  • Hu, Rui
  • Wang, Qian
  • Zhou, Chunyan

Abstract

During Donald Trump's presidency, his embrace of unilateral policies, coupled with a focus on trade protectionism—evidenced by the imposition of high tariffs and withdrawal from multilateral agreements—significantly influenced not only the dynamics but also the interactions among cryptocurrencies, US commodity markets, and US capital markets. This paper provides a quantitative analysis of how Trump's tenure shaped the spillover effects across these markets. The results reveal that, during Trump's presidency, the total spillover across assets was notably dampened, primarily due to the diminishing spillover influence of the US dollar. Additionally, the spillover intensity of Bitcoin to other assets strengthened significantly during this period, with Treasury bills and crude oil following closely behind. In contrast, the US stock market and the US dollar clearly experienced a reduction in their spillover dominance. These results carry significant economic implications for investors in their portfolio allocation.

Suggested Citation

  • Wei, Yu & Hu, Rui & Wang, Qian & Zhou, Chunyan, 2026. "The trump shockwave: How presidential tenure redefined cross-asset spillovers in cryptocurrency, commodity, and capital markets," Finance Research Letters, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:finlet:v:89:y:2026:i:c:s1544612325026066
    DOI: 10.1016/j.frl.2025.109357
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    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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