Tag Archives: chaos

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

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 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

Global markets on edge: Trade wars, tariffs, and crypto chaos in focus

Global markets on edge: Trade wars, tariffs, and crypto chaos in focus

It is clear that the world is navigating a complex and uneasy landscape. I will be sharing my observations for 25 February 2025. Monday’s choppy trading session on Wall Street painted a vivid picture of the uncertainty gripping investors, with major US equity indices finishing the day as a mixed bag.

The MSCI US index slipped 0.6 per cent, dragged lower by a 1.5 per cent drop in the information technology sector, while the tech-heavy Nasdaq took an even sharper hit, tumbling 1.2 per cent. What’s driving this jittery sentiment?

Trade war fears are casting a long shadow, fuelled by President Donald Trump’s latest comments on sweeping tariffs targeting imports from Canada and Mexico, set to kick in next week after a month-long delay expires. Add to that his memorandum aimed at curbing Chinese investment in key American sectors like tech and energy, and you’ve got a recipe for heightened global risk aversion.

Let’s start with the trade war angle, because it’s the elephant in the room. Trump’s insistence that tariffs on Canada and Mexico “will go forward” has sent ripples through markets already on edge. These aren’t small players—Canada supplies roughly 60 per cent of US crude oil imports, while Mexico is a critical cog in the North American supply chain, particularly for auto parts and manufacturing.

A 25 per cent tariff on these imports, as Trump has hinted, could jolt consumer prices for everything from gasoline to cars, stoking inflation fears at a time when the Federal Reserve is gearing up to digest key inflation data later this week. The personal consumption expenditures (PCE) price index, a Fed favourite, is on the horizon, and any sign of tariff-driven price spikes could complicate its delicate balancing act between growth and inflation control.

Markets are already pricing in this tension, with US Treasury yields dipping slightly—10-year yields fell 2 basis points to 4.40 per cent, and 2-year yields hovered around 4.17 per cent. It’s a subtle shift, but it signals investors seeking safety amid the storm.

Across the Atlantic, there’s a glimmer of stability amidst the chaos. Germany’s federal election on Sunday delivered a win for Friedrich Merz and the conservative CDU/CSU coalition, a result that’s been met with cautious optimism. Merz’s victory sidesteps the extremes of populist upheaval, offering a steady hand to Europe’s largest economy at a time when trade tensions could easily spill over into the Eurozone.

German stocks have seen a modest lift from this outcome, though broader European indices like the Stoxx 600 haven’t escaped the tariff-related gloom, shedding 0.7 per cent earlier this week. It’s a reminder that while domestic politics can provide a buffer, the interconnectedness of global trade means no one’s fully insulated from Trump’s tariff salvo.

Over in Asia, the mood is decidedly sour. The MSCI Asia ex-Japan index dropped 0.91 per cent on Monday, with Hong Kong’s Hang Seng and China’s CSI 300 relinquishing early gains to close down 0.58 per cent and 0.22 per cent, respectively. Chinese tech stocks, already battered by regulatory scrutiny and a slowing domestic economy, took another hit as Trump’s memorandum targeting Chinese investment in US tech and energy sectors added fuel to the fire.

This isn’t just about tariffs—it’s a broader signal of escalating US-China rivalry, with strategic sectors like semiconductors and renewable energy caught in the crosshairs. Early trading in Asia this morning showed indices still in the red, though US equity futures are hinting at a potential rebound when Wall Street opens later today. It’s a classic push-and-pull—risk-off sentiment clashing with bargain-hunting optimism.

Commodities, meanwhile, are telling their own story. Gold climbed 0.4 per cent to a record high on Monday, a clear sign that safe-haven demand is surging as investors brace for turbulence. Brent crude nudged up 0.5 per cent, buoyed by fresh US sanctions on Iran and OPEC’s pledge to offset overproduction, though the bigger picture remains murky.

Tariffs on Canadian oil could tighten North American supply chains, potentially pushing prices higher, but a broader trade war might dampen global demand, pulling them back down. It’s a tug-of-war that’s keeping oil traders on their toes. The US Dollar Index, meanwhile, held steady at 106.66, reflecting a market that’s not yet ready to bet big on either a flight to safety or a risk-on rally.

Now, let’s pivot to the crypto corner, where the mood is even bleaker. Ether, Solana, and Dogecoin are reeling, down 5 per cent, 8.3 per cent, and 7 per cent respectively, as the sector licks its wounds from last week’s massive hack—the biggest in its history. Since mid-December, most altcoins have shed 30-80 per cent of their value, according to Arca, a digital asset manager.

Bitcoin’s holding up better, hovering around US$94,300, but the broader crypto market is under siege. The guilty plea from OKX, a major exchange, for violating US anti-money laundering laws doesn’t help—it’s a US$505 million reminder of the regulatory risks still haunting the space.

Yet, there’s a silver lining in South Korea, where the Financial Services Commission (FSC) just greenlit a roadmap for institutional investors to dive into digital assets. Starting in the second half of 2025, corporates can open real-name accounts to sell crypto for fiat, with plans to expand access gradually. Blockchain advisor Anndy Lian’s bold prediction—that this could vault South Korea to the top of global crypto trading by year-end—might seem ambitious, but it underscores the shifting tides in institutional adoption.

So, where does this leave us? From my vantage point, the global risk sentiment feels like a tightrope walk. The tariff threats are real and imminent, with Canada and Mexico bracing for impact next week. The US economy, already navigating a post-pandemic recovery, could face higher costs and slower growth if trade frictions escalate, though Trump’s camp would argue it’s a necessary move to protect American jobs.

China’s tech clampdown adds another layer of complexity, potentially accelerating a decoupling that’s been years in the making. Yet, there are counterweights—Germany’s political stability, South Korea’s crypto pivot, and the resilience of safe-haven assets like gold suggest pockets of calm amid the storm.

I can’t help but see this as a pivotal moment. The data backs up the unease: equity indices are faltering, yields are softening, and crypto’s taking a beating. But there’s also a case for cautious optimism—US futures are pointing up, and Asia’s losses could be a buying opportunity for the bold. My take? We’re in for a bumpy ride, but markets have a way of finding their footing.

The real test will come later this week with those US inflation numbers—if they’re hotter than expected, all bets are off. For now, I’d keep an eye on gold and the dollar, the quiet sentinels of a world holding its breath.

 

Source: https://e27.co/global-markets-on-edge-trade-wars-tariffs-and-crypto-chaos-in-focus-20250225/

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