April 7th, 2025

US-China trade war escalates: Bitcoin falls below US$78K amid market chaos

The escalating trade tensions between the United States and China, particularly in light of President Donald Trump’s recent tariff policies is giving me chills. The announcement of these sweeping tariffs, dubbed “Liberation Day” by the Trump administration, has sent shockwaves through financial markets, impacting everything from traditional equities to cryptocurrencies like Bitcoin and Ethereum.

Today, on April 7, 2025, the world is grappling with the fallout of this bold economic move, and I’d like to offer my perspective on how these developments are reshaping the global financial landscape, with a particular focus on their implications for cryptocurrencies and broader market sentiment.

The latest chapter in this saga began when Trump unveiled a comprehensive tariff strategy on April 2, 2025, imposing a 10 per cent baseline levy on all US imports, with steeper duties targeting specific countries—34 per cent on China and 20 per cent on the European Union, among others. This policy, aimed at addressing trade imbalances and bolstering domestic manufacturing, was met with swift retaliation from Beijing, which announced additional 34 per cent tariffs on all US goods just days later.

The tit-for-tat escalation has heightened fears of a full-blown global trade war, pushing investors to seek refuge in safe-haven assets like US Treasury bonds and gold, while riskier assets—stocks, commodities, and cryptocurrencies—have taken a significant hit. The MSCI US index plummeted 6.0 per cent in response, with US equity futures signalling a further 3.3 per cent drop at the open, reflecting the deepening gloom among investors.

For cryptocurrencies, the impact has been particularly pronounced. Bitcoin, the bellwether of the crypto market, has tumbled below US$78,000, trading at US$77,840 as of Sunday—a six per cent decline that mirrors the broader retreat in risk sentiment. This drop comes after a staggering US$247 million in long liquidations rocked the market over a 24-hour period, a clear sign that traders are unwinding their bullish positions amid the uncertainty.

Ethereum, the second-largest cryptocurrency by market cap, has fared even worse, plunging below US$1,600 and erasing over 14 per cent of its value in the same timeframe, with US$217 million in liquidations adding fuel to the fire. These dramatic sell-offs underscore the vulnerability of digital assets to macroeconomic shocks, particularly when investor confidence in traditional markets begins to waver.

What’s striking about this downturn is how it contrasts with the optimism that surrounded cryptocurrencies earlier this year. Bitcoin hit an all-time high of US$109,000 in January, buoyed by Trump’s election victory in November 2024 and his subsequent pro-crypto rhetoric. During his campaign, Trump pivoted from being a crypto skeptic to a vocal supporter, promising to make the US the “crypto capital of the world” and even floating the idea of a national cryptocurrency stockpile.

That enthusiasm carried over into the early months of his administration, with Bitcoin trading above US$80,000 for much of 2025 despite intermittent volatility. Ethereum, too, enjoyed a robust start to the year, hovering above US$1,800 as recently as last week. But the tariff announcement has flipped the script, exposing the fragility of these gains in the face of broader economic headwinds.

The interplay between Trump’s tariffs and the crypto market is a fascinating case study in how geopolitical and economic policies can ripple through decentralised ecosystems. Historically, Bitcoin has been touted as a hedge against inflation and economic instability—qualities that should, in theory, make it resilient during times like these.

Indeed, some analysts argue that tariffs could ultimately bolster Bitcoin’s long-term appeal by weakening the US dollar’s dominance and driving interest in alternative assets. Jeff Park from Bitwise Asset Management, for instance, suggested that a sustained tariff war could be “amazing for Bitcoin in the long run” due to its potential to undermine traditional currencies. Yet, in the short term, the data tells a different story: Bitcoin and Ethereum are moving in lockstep with risk assets like tech stocks, not as a counterweight to them.

This correlation is evident in the broader market dynamics. The Nasdaq Composite, a tech-heavy index, is careening toward a bear market, while the S&P 500 has shed 4.8 per cent in a single day—its worst drop since June 2020. Defensive sectors like Consumer Staples and Real Estate, while still down, have outperformed the broader market, signalling a flight to safety that hasn’t yet extended to cryptocurrencies.

Meanwhile, commodities like Brent crude have slumped toward US$65 per barrel, reflecting fears that tariffs will dampen global demand growth just as OPEC+ ramps up supply. The US Dollar Index has edged up 0.9 per cent, consolidating recent losses, but Treasury yields are pulling back—the 10-year at 3.99 per cent and the 2-year at 3.65 per cent—as recession odds climb. Gold, typically a rival safe haven to Bitcoin, has held firm above US$3,000 per ounce despite a 2.5 per cent dip, underscoring its enduring appeal in times of crisis.

Digging deeper into the crypto sell-off, the liquidation cascade offers a window into the mechanics of this downturn. For Ethereum, a single whale’s US$106 million loss—triggered by the sale of 67,570 ETH on Maker—appears to have sparked a chain reaction, dragging prices from above US$1,800 to US$1,500 in a matter of hours. Another investor’s sale of 14,014 ETH, valued at $22 million, further amplified the panic, pushing Ethereum to levels not seen since October 2023.

These events highlight the leveraged nature of the crypto market, where large positions can magnify price swings, especially during periods of heightened uncertainty. Bitcoin, while less severely impacted, still saw its own wave of liquidations, with US$247 million wiped out as traders rushed to exit long positions.

In my humble point of view, the tariffs are acting as a double-edged sword for cryptocurrencies. On one hand, they’re stoking fears of slower growth and higher inflation—conditions that could, over time, drive adoption of decentralised assets as a hedge against traditional systems.

Trump’s own pro-crypto stance, including his March announcement of a strategic reserve featuring Bitcoin and Ethereum, lends credence to this narrative. Yet, in the immediate term, the market is behaving more like a risk proxy than a safe haven. The Fear & Greed Index, a barometer of crypto sentiment, remains mired in “fear” territory, a stark contrast to the exuberance of earlier this year.

Looking ahead, the trajectory of this trade war will be critical. Federal Reserve Chair Jerome Powell has signalled that the central bank won’t rush to cut rates in response to the tariffs, despite their potential to slow US growth and stoke inflation. This stance could exacerbate the pressure on risk assets if inflationary pressures persist without monetary relief.

For Bitcoin and Ethereum, a prolonged period of market turmoil could test key support levels—US$75,000 for Bitcoin and US$1,400 for Ethereum—before any recovery takes hold. Yet, if the tariffs weaken confidence in fiat currencies or trigger a broader shift away from dollar-centric systems, as some experts predict, cryptocurrencies could emerge stronger on the other side.

As I reflect on these developments, I’m struck by the paradox at play. Trump’s tariffs, intended to strengthen the US economy, are instead unleashing chaos across global markets, including the very crypto ecosystem he’s championed. For investors, the challenge lies in navigating this volatility—balancing the short-term pain of sell-offs against the long-term promise of digital assets. From where I stand, the story is far from over.

The coming weeks will reveal whether this is a temporary blip or the start of a deeper reckoning for cryptocurrencies and the global economy alike. One thing is certain: in this interconnected world, no market is an island, and the reverberations of “Liberation Day” will be felt for months, if not years, to come.

Source: https://e27.co/us-china-trade-war-escalates-bitcoin-falls-below-us78k-amid-market-chaos-20250407/

Anndy Lian

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com

j j j

March 21st, 2025

Global economy on edge: What it signals for investors amid economic uncertainty

The global financial landscape today, March 21, 2025, is a complex tapestry woven with threads of uncertainty, cautious optimism, and shifting economic priorities. Let’s unpack this and offer my perspective on what’s driving these dynamics, where things might be headed, and what it all means for investors, policymakers, and everyday people keeping an eye on their financial futures.

Global risk sentiment and central bank ambiguity

The global risk sentiment being described as “tentative” feels like an apt reflection of the moment we’re in. Central bank meetings, which are typically a cornerstone for market stability, seem to have left us with more ambiguity than clarity. It’s not uncommon for these gatherings—whether it’s the Federal Reserve, the European Central Bank, or others—to set the tone for monetary policy expectations, influencing everything from interest rates to currency strength.

But when they raise “more questions than answers,” as the Market Wrap notes, it signals a lack of consensus or a hesitancy to commit to bold moves. Perhaps central bankers are grappling with the same uncertainties as the rest of us: inflationary pressures that refuse to fully subside, geopolitical tensions exacerbated by trade policies, and a global economy that’s still finding its footing post-pandemic.

My take is that this ambiguity is less about indecision and more about a deliberate wait-and-see approach. Central banks are likely holding their cards close, waiting for clearer signals from corporate earnings and trade developments before making significant policy shifts.

Corporate earnings, tariffs, and market reactions

Speaking of corporate earnings, they’re poised to be the next big litmus test for the markets. Investors are hungry for guidance, and rightly so. With tariff fears casting a long shadow, the performance of major companies could either bolster confidence or deepen the unease.

In the US, where the MSCI US index slipped by 0.2 per cent, the energy sector’s modest 0.4 per cent gain stands out as a bright spot. This uptick aligns with the rise in Brent crude prices to US$75 per barrel, fuelled by OPEC+’s new schedule for oil output cuts.

It’s a reminder that energy markets remain a critical driver of sentiment, especially as supply constraints—like the US sanctions on a Chinese refinery tied to Iranian oil—tighten the screws further. For American investors, the upcoming earnings season will be a chance to see if companies can navigate these headwinds, particularly with new tariffs looming on the horizon.

Those tariffs, announced by US President Donald Trump to take effect on April 2, are a game-changer. The promise of both broad reciprocal tariffs and sector-specific measures suggests a continuation of his administration’s aggressive trade stance.

From my perspective, this move is less about economic protectionism in a vacuum and more about geopolitical leverage. Trump’s strategy seems to hinge on using tariffs as a bargaining chip—pressuring trading partners into concessions while signaling strength to domestic audiences. The timing, just over a week from now, adds urgency to the mix.

Markets hate uncertainty, and with Asian equities already showing mixed responses and US equity futures pointing to a flat open, it’s clear that investors are bracing for turbulence. The delay of the European Union’s proposed tariff on American whiskey this week feels like a small reprieve, perhaps a diplomatic nod to avoid escalating tensions further, but it’s a drop in the bucket compared to the broader tariff storm brewing.

In China, the focus on bellwethers like Xiaomi Corp. and Tencent Holdings Ltd. is particularly telling. These tech giants have been at the heart of China’s recent stock surge, a rally that’s defied global headwinds to some extent. Investors are now asking whether this momentum is sustainable or if it’s a house of cards built on speculative exuberance.

My view is that China’s market resilience reflects a mix of domestic policy support and a pivot by companies to diversify away from US-centric supply chains—a direct response to past tariff pressures. Xiaomi’s push into emerging markets and Tencent’s dominance in digital ecosystems could provide the earnings firepower needed to keep the rally alive. But if these reports disappoint, it might expose cracks in China’s economic facade, especially as US sanctions and tariffs tighten the noose on key sectors like refining.

Financial indicators and the energy-crypto divide

Shifting to the financial indicators, the US Treasury yields dropping—with the 10-year at 4.24 per cent and the 2-year at 3.96 per cent—suggests a flight to safety amid the uncertainty. Lower yields typically signal that investors are seeking the relative security of government bonds over riskier assets, a trend reinforced by the US Dollar index’s 0.4 per cent gain as it consolidates recent losses. Gold holding firm above US$3,000 per ounce further underscores this cautious mood—it’s the classic safe-haven play.

Yet, there’s a paradox here: Brent crude’s 1.7 per cent rise indicates that not all risk assets are out of favour. My interpretation is that we’re seeing a bifurcated market—energy and commodities holding up due to supply-side dynamics, while equities and bonds reflect broader trepidation about growth prospects.

Now, let’s dive into the cryptocurrency angle, which adds another layer of intrigue. Bitcoin’s market sentiment hitting a two-year low, as per CryptoQuant’s Bull Score Index of 20, is a stark warning. This index, blending ten metrics like network activity and investor behaviour, paints a picture of a “weak environment” unlikely to support a sustained rally.

Historically, Bitcoin needs a score above 60 to fuel significant price surges, and prolonged periods below 40 align with bear markets. As someone who’s tracked crypto’s rollercoaster ride, I see this as a natural ebb in the cycle. The euphoria of past bull runs—often tied to macroeconomic stimulus or institutional adoption—has given way to a sober reality.

Regulatory scrutiny, energy cost debates, and now tariff-induced economic uncertainty could be dampening enthusiasm. For Bitcoin holders, this might feel like a gut punch, but it’s not necessarily a death knell. Markets move in waves, and a bearish phase could set the stage for a stronger rebound if fundamentals like adoption or halving effects kick in later.

Ethereum, meanwhile, offers a glimmer of hope amid the gloom. Its price hovering around US$1,970, with a key support level at US$1,861, suggests resilience. The nine per cent recovery earlier this week, followed by a 3.5 per cent dip, shows volatility but also potential. If that US$1,861 support holds, a push toward the March 7 high of US$2,258 isn’t out of the question. The technicals back this up: the RSI climbing to 40 from an oversold 30 indicates fading bearish momentum, though it needs to break 50 for a confirmed recovery.

The MACD’s bullish crossover and rising green histograms above zero add to the case for upward strength. From my standpoint, Ethereum’s outlook hinges on broader market sentiment and its ability to differentiate itself from Bitcoin’s struggles. If tariff fears ease or corporate earnings surprise to the upside, ETH could ride that wave. But a break below US$1,861 would open the door to a drop toward US$1,700—a level that could test the resolve of even the most ardent HODLers.

The interconnectedness of markets

Stepping back, what strikes me most about this Market Wrap is the interconnectedness of it all. Tariffs don’t just affect trade balances; they ripple through equity markets, commodity prices, and even cryptocurrencies. Central bank hesitancy amplifies the noise, leaving corporate earnings as the next beacon.

My point of view is cautiously pragmatic: we’re in a transitional phase where old playbooks—whether for stocks, bonds, or crypto—are being rewritten. Investors should watch China’s tech giants for signs of durability, lean into energy’s relative strength, and brace for tariff-driven volatility. For crypto enthusiasts, patience might be the best strategy—Bitcoin’s malaise and Ethereum’s teetering recovery suggest a market in purgatory, awaiting a catalyst.

In conclusion, the global economy today feels like a tightrope walk. The stakes are high, and the safety net is fraying. I see my role as cutting through the noise to spotlight the data and trends that matter. Right now, that means recognising the weight of tariffs, the pivotal role of earnings, and the fragile state of risk assets like crypto.

We’re not in freefall, but we’re not on solid ground either—April 2, when those tariffs hit, could be the tipping point that defines the next chapter.

Source: https://e27.co/global-economy-on-edge-what-it-signals-for-investors-amid-economic-uncertainty-20250321/

Anndy Lian

www.anndy.com

j j j

March 14th, 2025

A shifting global landscape: Trade wars, market sentiment, and the rise of crypto amid uncertainty

The news that the United States appears poised to dodge a government shutdown has undeniably injected a dose of optimism into an otherwise jittery financial landscape. A stopgap funding bill, seemingly on track to pass, has eased immediate fears of fiscal paralysis in Washington, offering markets a rare moment of relief.

Yet, beneath this surface-level calm, a deeper unease persists, fuelled by President Donald Trump’s escalating tariff war and its far-reaching implications. With threats of a staggering 200 per cent tariff on European wine, champagne, and other alcoholic beverages, alongside a refusal to roll back newly enacted steel and aluminium tariffs, the spectre of a broadening trade conflict looms large.

Against this backdrop, equity markets are reeling, safe-haven assets are surging, and the cryptocurrency sector is witnessing historic investments—all of which paint a complex picture of a world in flux.

Let’s start with the positive news: the avoidance of a US government shutdown. For weeks, investors had braced for the possibility of a budgetary stalemate, a scenario that could have disrupted government operations, delayed payments, and rattled confidence in an already fragile economy. The stopgap funding bill, while not a long-term fix, buys time and signals that lawmakers can still find common ground when push comes to shove.

This development has buoyed global risk sentiment, as evidenced by a modest uptick in US equity index futures, which suggest stocks could open 0.8 per cent higher. It’s a small but meaningful reprieve, a reminder that political gridlock doesn’t always translate into economic disaster. For a moment, the focus shifts away from Washington’s dysfunction and back to the broader forces shaping the global economy.

But that relief is tempered by a much larger concern: the intensifying trade war spearheaded by President Trump. His latest salvo—a threatened 200 per cent tariff on European alcoholic beverages—has sent shockwaves through markets already grappling with the fallout from earlier tariff hikes.

This isn’t just about wine and champagne; it’s a signal of Trump’s unrelenting commitment to a protectionist agenda, one that’s now ensnaring Europe in addition to long-standing targets like China, Canada, and Mexico. Add to that his decision to stand firm on steel and aluminum tariffs, which took effect this week, and you have a recipe for heightened uncertainty.

These moves threaten to upend supply chains, inflate consumer prices, and strain diplomatic ties at a time when global growth is already slowing. The US, as the world’s largest economy, doesn’t operate in a vacuum—its policies ripple outward, and right now, those ripples feel more like tidal waves.

The equity markets tell the story of this unease. The MSCI US index, a broad measure of American stocks, has tumbled 1.5 per cent in its latest session, pushing its three-week decline past 10 per cent. This isn’t a mere correction; it’s a rout, a reflection of investor fears that Trump’s tariff policies could tip the US into a recession. Defensive sectors like utilities, up 0.3 per cent, are outperforming as investors flee riskier assets, a classic flight-to-safety move.

Meanwhile, Europe and China are emerging as unexpected bright spots. European equities, despite the looming tariff threat, are holding up better than their US counterparts, perhaps because investors see them as undervalued after years of underperformance.

China, too, offers compelling opportunities, with its markets buoyed by stimulus measures and a relative insulation from direct US consumer spending pressures. It’s a stark contrast to the plummeting US shares, which have fallen sharply from their record highs just weeks ago.

Bond markets are flashing their own warning signs. US Treasury yields have dipped, with the 10-year yield dropping 4.4 basis points to 4.27 per cent and the 2-year yield falling 2.9 basis points to 3.96 per cent. Falling yields signal a rush to safety, as investors pile into government debt amid fears of economic slowdown. The US Dollar index, up a modest 0.2 per cent, is consolidating after recent losses, suggesting currency markets are in a wait-and-see mode.

Gold, however, is stealing the show, climbing 1.9 per cent and inching closer to the US$3,000-per-ounce mark. This surge underscores its role as a haven asset in times of turmoil, a trend amplified by the trade war’s erosion of confidence in traditional growth drivers.

Brent crude, on the other hand, is sliding—down 1.5 per cent to around US$70 per barrel—as fears of reduced oil demand in a trade-constrained world take hold. Asian equities, meanwhile, are mixed, reflecting the region’s uneven exposure to US policies and its own domestic dynamics.

Amid this traditional market turbulence, the cryptocurrency sector is carving out a narrative of its own. Binance, one of the world’s leading crypto exchanges, has just secured a jaw-dropping US$2 billion investment from MGX, an Abu Dhabi-based firm. This deal isn’t just big—it’s historic, surpassing FTX’s US$1 billion raise in 2021 and marking the largest single investment ever in a crypto company.

Paid in stablecoin, no less, it’s a bold statement about the maturation of digital assets as a legitimate investment class. Binance CEO Richard Teng called it a “significant milestone,” and he’s not wrong. At a time when equities are faltering and trade wars are sowing chaos, crypto is positioning itself as a frontier of opportunity, one that thrives on disruption. The investment will likely fuel Binance’s expansion, bolster its compliance efforts, and strengthen its appeal to institutional players—a sign that the crypto ecosystem is growing up fast.

Not to be outdone, Crypto.com is making waves of its own with a strategic partnership in the UAE. Teaming up with Tawasal Al Khaleej, a tech and AI powerhouse, Crypto.com is set to integrate its trading platform into Tawasal’s Superapp, reaching nearly four million users across the Middle East. This two-phase rollout—starting with referrals and expanding into deeper tech integration—underscores the UAE’s emergence as a hub for digital finance.

Eric Anziani, Crypto.com’s President and COO, hailed the deal as a model for how crypto can merge with mainstream tech ecosystems, driving adoption and innovation. It’s a savvy move, one that capitalises on the region’s forward-thinking regulatory stance and growing appetite for digital assets.

But the crypto market isn’t immune to the broader storm. Bitcoin, the bellwether of the space, has been on a wild ride, flirting with US$80,000 before pulling back as Trump’s tariff threats weigh on sentiment. The broader crypto market has shed US$1 trillion in value over the past month, a stark reminder that even this nascent asset class isn’t decoupled from global macro forces.

The initial hype around Trump’s pro-crypto rhetoric—fueled by his campaign promises to embrace blockchain—has faded as the reality of his trade policies sinks in. BlackRock CEO Larry Fink’s recent comments hit the nail on the head: nationalism, while appealing to some, could stoke inflation, a dynamic that could squeeze both traditional and digital markets. For now, Bitcoin and its peers are caught in the crossfire, their volatility a mirror to the uncertainty gripping the world.

The Ethereum spot ETF market offers another lens into this turbulence. Data from SoSoValue shows a net outflow of US$73.6 million from these funds on March 13, with Grayscale’s Ethereum Trust (ETHE) bleeding US$41.7 million and its Mini Trust losing US$5.2 million. VanEck’s ETF, by contrast, saw a modest US$1.4 million inflow, a rare bright spot.

With a total net asset value of US$6.5 billion and a cumulative historical inflow of US$2.6 billion, Ethereum ETFs remain a significant player, but the outflows signal investor caution. The trade war’s shadow, coupled with inflationary fears, is prompting a rethink of risk exposure, even in the crypto space.

So where does this leave us? From my vantage point, the global economy is at a crossroads. The averted shutdown is a win, no doubt, but it’s a fleeting one against the backdrop of Trump’s tariff escalation. Markets are nervous, and rightly so—protectionism rarely ends well, as history’s Smoot-Hawley debacle reminds us.

Yet amid the chaos, opportunities are emerging, from undervalued equities in Europe and China to the crypto sector’s bold strides. Gold’s rally and crypto’s resilience suggest investors are hedging their bets, seeking refuge in assets that might weather the storm.

“I see this as a moment of reckoning: the old rules are bending, and the new ones are still being written. Whether that’s a cause for alarm or excitement depends on where you’re standing—and how much risk you’re willing to take.” — Anndy Lian

Source: https://e27.co/a-shifting-global-landscape-trade-wars-market-sentiment-and-the-rise-of-crypto-amid-uncertainty-20250314/