Tag Archives: balance

Gold soars, crypto bleeds: The fragile balance of a world on the brink of trade war

Gold soars, crypto bleeds: The fragile balance of a world on the brink of trade war

At the heart of this financial storm lies former President Donald Trump’s announcement of a sweeping 100 per cent tariff on Chinese imports, set to take effect on November 1, 2025. This policy declaration, made via Truth Social, has sent shockwaves through equities, commodities, and digital asset markets alike, effectively dismantling the fragile optimism that had built up around potential US-China trade détente.

Far from being an isolated political gesture, this move has functioned as a macroeconomic detonator, exposing the deep interconnections between traditional finance and the crypto economy, and triggering the largest single-day liquidation event in cryptocurrency history.

Markets had initially responded with cautious optimism to signals that both Washington and Beijing remained open to dialogue. US equities posted strong gains on Monday, with the Nasdaq surging over two per cent as AI-related semiconductor deals buoyed tech sentiment.

Simultaneously, gold prices soared to unprecedented levels, reaching US$4,106 per ounce, a figure corroborated by multiple market data sources that place the price of gold on October 14, 2025, firmly in the US$4,145 to US$4,154 range. This record-breaking rally in the ultimate safe-haven asset was not a sign of confidence but a clear signal of deep-seated anxiety about the future.

Investors were hedging against a dual threat: the immediate risk of a new trade war and the longer-term expectation of aggressive interest rate cuts by the Federal Reserve to counter the resulting economic slowdown. The rise in the US Dollar Index to 99.27 further underscores this flight to safety, even as Brent crude oil held steady at US$63.80 per barrel, supported by the faint hope that high-level talks between the two superpowers might yet avert disaster.

However, this fragile equilibrium was shattered by the full implications of Trump’s tariff plan. The proposed 100 per cent duty, targeting critical sectors like semiconductors and e-commerce, is not merely a trade policy but a declaration of economic warfare. The market’s reaction was instantaneous and brutal.

Asian equities, particularly Hong Kong’s Hang Seng Index, plunged as the region braced for the direct impact on its export-driven economies. This risk-off sentiment bled directly into the cryptocurrency market, which has, for all the talk of “digital gold” and macro decoupling, proven to be acutely sensitive to shifts in the S&P 500, with its 24-hour correlation spiking to +0.52. The narrative that crypto had evolved into a separate, uncorrelated asset class evaporated overnight, revealing it to be just another risk asset in a global liquidity crunch.

The actual carnage, however, unfolded in the opaque world of crypto derivatives. The market had been swimming in a sea of excess leverage, with open interest having ballooned by 91 per cent month-over-month to a staggering US$947 billion. This created a highly combustible environment where any sharp price move could trigger a cascade of forced selling.

Trump’s announcement provided the spark. In a matter of hours, over US$19 billion in leveraged positions were liquidated, marking the largest single-day wipeout since the market turmoil of March 2020. The data is unequivocal: 87 per cent of these liquidations were long positions, indicating a market that was overwhelmingly bullish and entirely unprepared for a sudden reversal.

This “leverage flushout” was not a natural market correction but a systemic purge, where the architecture of perpetual futures contracts and high-leverage trading turned a macro shock into a self-reinforcing spiral of selling. The pain was not distributed evenly; altcoins bore the brunt of the selloff, as evidenced by the ETH/BTC ratio collapsing to a three-year low of 0.22, signaling a flight to the relative safety of Bitcoin within the crypto ecosystem itself.

This event represents a profound reset in market sentiment. The Fear & Greed Index’s plunge from “Greed” at 62 to “Neutral” at 42 is a stark indicator of the psychological shift. Traders who had grown complacent in a low-volatility environment were abruptly reminded of the inherent risks of a highly leveraged, globally interconnected market. The negative funding rates in perpetual futures markets, which flipped to incentivise short sellers, further cemented the bearish momentum.

Yet, within this chaos, there are signs of potential stabilisation. The premium on Tether (USDT) above its US$1 peg, currently at US$1.005, suggests that a significant pool of sidelined cash is waiting on the sidelines, ready to re-enter the market once the dust settles. This “dry powder” could fuel a powerful relief rally should there be any sign of de-escalation from either Washington or Beijing.

In conclusion, the current market downturn is not a simple correction but the result of a perfect storm. A geopolitical shockwave from a proposed 100 per cent tariff has collided with a structurally over-leveraged crypto market, creating a feedback loop of forced liquidations and panic selling. While technical indicators like the RSI-7 at 33.6 suggest the market is oversold and primed for a bounce, any sustainable recovery hinges on external factors beyond the market’s control.

The path forward depends almost entirely on the next moves in the US-China standoff. Should China respond with its own aggressive measures, such as curbing exports of critical rare earth minerals, the risk-off environment could deepen and prolong the pain. Conversely, a diplomatic breakthrough or even a softening of rhetoric could trigger a powerful short-covering rally.

Let’s see.

 

Source: https://e27.co/gold-soars-crypto-bleeds-the-fragile-balance-of-a-world-on-the-brink-of-trade-war-20251014/

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

The rate cut rally: Earnings, gold, and Bitcoin in the balance

The rate cut rally: Earnings, gold, and Bitcoin in the balance

History shows that equities often deliver solid gains in the year following the start of such cycles, with the S&P 500 averaging around 14 per cent returns over 12 months based on past data from various cycles. Yet the initial month after the first cut tends to bring choppiness, as markets adjust to shifting monetary policy.

In this case, equities rallied strongly leading up to the cut, pushing the S&P 500 up 15 per cent in the past six months and a whopping 32 per cent from its yearly lows. I see this preemptive surge as a sign of market optimism, but it also raises flags for potential consolidation ahead.

Investors priced in these cuts long ago, so the real test comes from upcoming events like speeches from 10 FOMC governors and the PCE inflation report due on September 26. If inflation data surprises on the upside, volatility could spike, reminding everyone that even dovish Fed actions carry risks in an economy where growth projections and unemployment trends diverge sharply.

Fund managers’ bold bets on risk assets

Fund managers continue to lean heavily into risk assets, particularly equities, despite nagging worries about persistent inflation and a weakening US dollar. This positioning strikes me as bold, perhaps overly so, given the mixed signals from the broader economy. Many in the industry view artificial intelligence as a deflationary force that could counter current inflationary pressures, an idea that holds water when you consider how AI efficiencies might drive down costs in sectors like manufacturing and services.

Gold’s performance this year underscores these tensions, with prices surging 38 per cent year-to-date amid buoyant rate-cut expectations and geopolitical uncertainties. Research into recent gold price drivers points to factors like central bank buying, trade tensions, and lower interest rates making the metal more appealing as a hedge.

However, fund flows indicate much of this buying stems from speculation rather than genuine hedging, and professional asset managers maintain low exposure to gold and digital assets. In my view, this creates intriguing opportunities for savvy investors to buy on dips, especially as gold hit US$3685.30 per ounce recently. The under-allocation by institutions suggests room for further upside if economic headwinds intensify, but it also warns against chasing the rally without careful consideration.

Balancing strategy: Barbell approach and diversification

Strategic advice in this environment boils down to respecting the Fed’s direction without blindly following the herd. The central bank’s dovish stance supports companies with strong earnings growth, yet piling into mega-cap tech stocks at current valuations feels precarious. A barbell approach makes sense here, where you hold core positions in quality names, add selectively during pullbacks, and diversify into global themes and yield-focused plays.

Singapore’s yield stocks stand out, having outperformed the S&P 500 over both five- and ten-year periods, which bolsters the argument for regional diversification beyond US borders. I favour this strategy because it balances growth potential with income stability, particularly in a world where US-centric portfolios risk overexposure to domestic policy shifts.

With the Fed projecting more cuts on October 29 and December 12, lower rates could fuel corporate borrowing and expansion, but diverging economic indicators demand vigilance. Unemployment might tick up if growth slows more than expected, potentially pressuring equities despite the supportive policy backdrop.

Macro shifts and geopolitical influences

Turning to the broader macro picture, global risk sentiment holds firm thanks to the allure of additional rate cuts enhancing corporate earnings outlooks. The week ahead features the high-level General Debate at the 80th UN General Assembly starting Tuesday, with President Trump addressing the opening session and Fed Chair Powell discussing the economic outlook. These events could inject fresh narratives into markets, especially amid positive developments in US-China relations.

President Trump’s recent conversation with Chinese leadership led to a deal on the popular Chinese-owned social media app TikTok, allowing it to continue operations in the US under new controls, which eased some trade anxieties. Wall Street responded enthusiastically, with major indices hitting record highs on Friday, the Dow Jones up 0.37 per cent, S&P 500 up 0.49 per cent, and Nasdaq up 0.72 per cent.

Treasury yields edged higher, the 10-year at 4.127 per cent and the 2-year at 3.572 per cent, reflecting a mix of growth optimism and inflation watchfulness. The dollar index climbed 0.30 per cent to 97.64, while gold rose 1.1 per cent on rate-cut bets. Brent crude dipped 1.1 per cent to US$66.68 per barrel following EU sanctions on Russian oil vessels and buyers, highlighting ongoing energy market fragilities. Asian equities showed mixed results Friday and in early trading today, with US futures pointing to a lower open, suggesting caution amid these crosscurrents.

Bitcoin volatility and regulatory headwinds

Bitcoin’s recent dip adds another layer to the market mosaic, with the cryptocurrency falling 0.93 per cent to US$114,566 over the past 24 hours, lagging the broader crypto market’s 1.91 per cent decline. This underperformance stems from profit-taking after hitting recent highs, technical breakdowns near the US$115,400 resistance level, and regulatory uncertainties.

Drawing from similar patterns in September 2024 analyses, when Bitcoin traded around US$63,000 and faced consolidation phases, the current setup echoes familiar volatility drivers like leverage unwinds and momentum shifts. Over US$176 million in long positions were liquidated as prices tested US$115,000 support, amplifying the drop in a classic liquidity trap where open interest spiked 4.14 per cent to US$937 billion.

Traders piled in near resistance, only to face swift reversals, which I interpret as a healthy correction in an asset that has risen 81 per cent year-to-date. The failure to break above the 23.6 per cent Fibonacci retracement at US$115,400 triggered algorithmic selling, with the MACD histogram still positive at +265 but RSI hovering around 51-53, indicating waning momentum.

Bulls must secure a close above that level to reclaim initiative; otherwise, a breach of US$114,500, the 30-day simple moving average, could cascade toward US$110,000.

Regulatory developments weigh heavily on Bitcoin’s short-term path, presenting a neutral but noisy influence. The US Treasury’s commentary on the GENIUS Act, issued on September 20, emphasises stablecoin regulations requiring full reserves in liquid assets like Treasuries and technological capabilities for freezing assets, aiming to foster innovation while curbing risks. This act, signed into law earlier this year, mandates issuers to comply with federal laws, potentially stabilising the crypto ecosystem but introducing oversight that cools institutional enthusiasm.

Meanwhile, the EU’s MiCA regulation drives exchange consolidation, enforcing consumer protections, market integrity, and restrictions on stablecoin use as exchange mediums, which impacts global flows. Exchanges adapting to MiCA gain credibility and access to unified EU markets, but the compliance shifts have slowed inflows, with ETF volumes dipping and minor outflows from products like GBTC.

In my opinion, these headwinds represent growing pains for the sector; long-term clarity should prove bullish by attracting more institutional capital, yet the immediate uncertainty often halts rallies, as seen in past cycles.

Closing thoughts: Cautious optimism ahead

Overall, the market’s resilience amid the Fed’s pivot impresses me, but I remain cautious about overextended positions in tech and crypto. The historical precedent of positive equity returns post-rate cuts offers encouragement, yet the unique blend of geopolitical events like the UNGA, US-China thawing via the TikTok agreement, and persistent inflation worries calls for measured optimism. Gold’s speculative surge and Bitcoin’s technical wobbles serve as barometers for broader risk appetite, suggesting investors diversify thoughtfully.

The barbell strategy aligns with my view that quality growers paired with yield plays provide a sturdy foundation, especially as Singapore’s outperformance demonstrates the value of global exposure. With PCE data looming and more Fed cuts on the horizon, markets could consolidate, but the underlying dovish support tilts the scales toward gradual upside. Still, chasing crowds in mega-caps or digital assets without waiting for pullbacks risks unnecessary pain; patience often rewards in these environments.

As we head into the final quarter, keeping an eye on unemployment trends and corporate earnings will prove crucial, potentially defining whether this cycle mirrors the average 14 per cent gain or veers into choppier territory. The economy’s divergences remind us that while the Fed guides, real-world data ultimately steers the ship.

 

Source: https://e27.co/the-rate-cut-rally-earnings-gold-and-bitcoin-in-the-balance-20250922/

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

The Fed at the crossroads: Rate cuts, political pressure, and the fragile balance of global markets

The Fed at the crossroads: Rate cuts, political pressure, and the fragile balance of global markets

The global financial landscape is at a critical turning point, with central banks poised to adjust monetary policies amid evolving economic data and mounting political pressures. Markets are gearing up for the Federal Reserve’s expected 25-basis-point rate cut, a decision shaped not just by inflation trends but also by external influences, including from political figures such as Donald Trump. His newly confirmed economic adviser, Stephen Miran, now sits on the Federal Reserve Board, highlighting the growing friction between independent monetary policy and political agendas aimed at aligning interest rates with electoral or economic goals.

This Fed announcement does not happen in a vacuum. It comes against a backdrop of robust US retail sales in August, which rose 0.6 per cent month-over-month, well above the 0.2 per cent consensus estimate. This consumer strength led the Atlanta Fed to boost its Q3 GDPNow forecast to an annualized 3.4 per cent, underscoring the economy’s resilience even as easing measures loom.

The data’s implications cut both ways: strong spending hints that aggressive stimulus might not be necessary, yet cooling inflation, a softening labor market, and global demand challenges support a cautious rate reduction. The Fed faces a tightrope walk, where over-easing could reignite inflation or under-easing might choke off growth. Investors will parse every detail, from the dot plot projections to Chair Jerome Powell’s press conference, for clues on future moves.

A dovish dot plot suggesting multiple cuts ahead could spark rallies in risk assets and weaken the dollar. A more guarded tone, however, might fuel short-term volatility and bolster the greenback. This anticipation already weighed on equities Tuesday, with the Dow Jones falling 0.27 per cent, the S&P 500 dipping 0.13 per cent, and the Nasdaq edging down 0.07 per cent.

Bond yields showed restraint, with the 10-year Treasury steady at 4.03 per cent and the two-year note slipping two basis points to 3.51 per cent. The US dollar index dropped 0.69 per cent to 96.63, signaling bets on looser policy, while gold, a classic safe haven amid uncertainty, rose 0.2 per cent to US$3,687.67 per ounce, buoyed by central bank buying and a softer dollar.

In commodities, Brent crude jumped 1.53 per cent to US$68.47 per barrel, driven by supply fears from Ukrainian drone strikes on Russian refineries. Though targeted, these incidents add volatility to energy markets already strained by Middle East tensions and OPEC+ output controls. Asian stocks rallied early ahead of the Fed but pulled back by Wednesday morning, reflecting regional caution. US equity futures, in contrast, pointed higher, betting on a market-friendly outcome.

Other central banks are moving in tandem, or not. The Bank of Canada is set to trim its rate by 25 basis points to 2.50 per cent, mirroring the Fed’s response to easing inflation and domestic slowdowns. Bank Indonesia, however, is likely to hold steady at 5.00 per cent, focusing on rupiah stability amid political unrest and outflows. This policy divergence underscores a fragmented global cycle: advanced economies lean toward easing, while emerging markets battle currency risks and imported inflation.

Shifting to digital assets, Bitcoin broke through US$117,000 after weeks of consolidation, propelled by a high-profile lobbying push in Washington, D.C. Crypto leaders such as Michael Saylor of Strategy Inc. and Fred Thiel of MARA Holdings met lawmakers to advance the Strategic Bitcoin Reserve bill, aiming to create a national Bitcoin stockpile similar to the Strategic Petroleum Reserve.

This reflects the industry’s push for mainstream integration. Yet the surge wasn’t without drama: over US$175 million in positions liquidated in 24 hours, with longs hit hardest at US$107 million. Bitcoin’s open interest climbed 2.54 per cent, signaling fresh speculation, while Ethereum’s fell 1.64 per cent, keeping it stuck between US$4,430 and US$4,530. XRP edged up 1.53 per cent above US$3, but subdued volumes hinted at tempered enthusiasm.

Crypto sentiment stays balanced, with the Fear & Greed Index in neutral territory, no wild swings of greed or fear. Still, fragility lurks: Binance traders are net bearish on Bitcoin, with over 52 per cent of positions short per the Long/Short ratio, bracing for a potential retreat. Amid this, BNB shone, rising to over $957 and nearing its 52-week high of $963. This strength ties to reports of Binance nearing a deal to lift its US Department of Justice compliance monitor, a regulatory win that could ease operations and draw more investment. A push past US$1,000 could spark broader altcoin momentum.

In my view, this blend of policy pivots, geopolitical tensions, and crypto advocacy brews a volatile but opportunistic mix. The Fed’s cut, though anticipated, matters most for its forward signals: a path of steady easing could fuel equities, gold, and risk assets by easing recession worries. A data-dependent stance, however, might come off as hawkish, prompting sell-offs and dollar gains.

Politics adds unpredictability. Miran’s board seat, courtesy of a president prone to Fed critiques, could test the institution’s independence. If he pushes for aggressive cuts timed to midterms, it risks undermining credibility and roiling bonds. In commodities, oil’s climb signals escalation risks from Ukraine-Russia clashes; more strikes could sustain price pressures, hindering global inflation fights. Gold’s steadiness affirms its hedge value, especially as emerging-market central banks stockpile it against dollar swings and sanctions.

Crypto’s rally, while buoyed by lobbying, faces hurdles: the Bitcoin reserve bill’s fate is uncertain amid skepticism, and liquidations highlight leverage’s dangers. A Fed letdown or regulatory snag could trigger cascading sell-offs. BNB’s rise shows how clarity boosts value. Shedding oversight could attract institutions and ignite altcoins, yet Ethereum’s rut reveals uneven benefits from macro shifts.

Ultimately, we are entering a phase of acute market sensitivity, where central bank moves, political maneuvers, supply shocks, and regulatory shifts collide. Success hinges on balancing growth, inflation, and stability in a polarized world. For savvy investors, the upside is real; for the unwary, the ride could be rough.

 

Source: https://e27.co/the-fed-at-the-crossroads-rate-cuts-political-pressure-and-the-fragile-balance-of-global-markets-20250917/

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