Trump 2.0 could be really impactful for commodities and cryptocurrencies, creating opportunities, but also uncertainty in both markets.
For commodities, we have a see-saw effect. Potential tariffs are pushing commodity prices lower while sanctions on Russia, Iran, and Venezuela are potentially pushing energy higher. The tariff situation is fluid, but they’re essentially a tax on the global economy. Countries will be impacted in different ways. Retaliation from some countries could hurt the prices of certain commodities like corn and soybeans, but improve the prices of soft commodities. For example, cocoa and coffee demand would likely remain constant, unless Americans cut back on chocolate and coffee… an unlikely scenario !
Sanctions on Russia and Iran in 2025 could cause higher prices for energy because producers may not be able to export the same amount of oil as these sanctions are more rigorously enforced. Plus, new sanctions on Russia which were added at the end of the Biden administration can only be undone by a vote in Congress.
Cryptocurrencies had a strong finish in 2024, up more than 120%, and a good start in 2025. The Trump administration is firmly committed to supporting the digital asset space as seen in many crypto- friendly appointments and a potentially favorable regulatory framework. President Trump’s suggested “Strategic Bitcoin Reserve” has many supporters excited because the US government currently holds approximately $20 billion worth of bitcoin.* It’s supportive of prices as long as the market believes the US won’t sell these coins for years.
In my view, this year is certainly shaping up to be a memorable one for commodities and cryptocurrencies!
Get more information on our commodity and cryptocurrency ETFs and ETPs in the resources section below this video.
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Source: Bloomberg, as of 1/16/2025.
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Some commodities may benefit from the new administration, some not so much, while it’s expected to be crypto friendly.
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Important information
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There are risks involved with investing in ETFs, including possible loss of money. Index-based ETFs are not actively managed. Actively managed ETFs do not necessarily seek to replicate the performance of a specified index. Both index-based and actively managed ETFs are subject to risks similar to stocks, including those related to short selling and margin maintenance. Ordinary brokerage commissions apply. The Fund's return may not match the return of the Index. The Fund is subject to certain other risks. Please see the current prospectus for more information regarding the risk associated with an investment in the Fund.
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