Global markets reel as Trump tariffs slam stocks and Bitcoin prices

Global markets reel as Trump tariffs slam stocks and Bitcoin prices

On April 4, 2025, the US stock market experienced its worst single-day performance in years, shedding approximately US$2.5 trillion in value as investors fled to safe-haven assets like US Treasuries and gold. The MSCI US index plummeted by 4.9 per cent, with particularly brutal declines in the energy sector, down 7.5 per cent, and information technology, which fell 7.0 per cent.

Meanwhile, defensive sectors like consumer staples, up 0.7 per cent, and utilities, down just 0.6 per cent, managed to weather the storm far better than their cyclical counterparts. This dramatic shift in market sentiment has been fuelled by fears that Trump’s tariffs—the steepest increase in American trade barriers in over a century—could choke economic growth, drive up inflation, and potentially tip the US economy into a recession.

Trump’s latest tariff policy, announced after the market closed yesterday, imposes a blanket 10 per cent tariff on imports from every country in the world, effective April 5. Citing his authority under the International Emergency Economic Powers Act of 1977, the president framed the move as a necessary step to protect American industries and workers. However, economists are sounding the alarm about the near-term consequences. Higher tariffs are widely expected to increase the cost of imported goods, pushing up prices for American consumers already grappling with inflationary pressures.

At the same time, retaliatory measures from trading partners could dampen US exports, further slowing economic activity. Some analysts warn that the combination of higher prices and weaker growth could create a stagflationary environment, while others see a full-blown recession as a real possibility if the tariffs remain in place for an extended period. With markets now laser-focused on Friday’s US jobs report and an upcoming speech by Federal Reserve Chair Jerome Powell, investors are desperate for clues about how policymakers might respond to this escalating crisis.

The bond market has also reacted decisively, with Treasury yields dropping as expectations of Federal Reserve rate cuts grow. The 10-year Treasury yield fell 10.2 basis points to 4.03 per cent, while the 2-year yield slid 17.7 basis points to 3.68 per cent, reflecting heightened recession fears and a flight to safety.

The US dollar index, meanwhile, shed 1.7 per cent, continuing its downward trend as investors reassess the outlook for US growth. Gold, a classic safe-haven asset, held steady at US$3,100 per ounce despite a modest 0.6 per cent dip, buoyed by persistent demand amid the uncertainty.

On the commodities front, Brent crude oil took a significant hit, tumbling 6.4 per cent to US$70 per barrel as traders worried that tariffs would sap global demand growth just as OPEC+ ramps up supply. Asian equities followed Wall Street’s lead, opening sharply lower, and US equity futures suggest stocks will start the day down an additional 0.2 per cent, signalling that the pain may not be over yet.

The cryptocurrency market has not been immune to this turmoil, with Bitcoin experiencing a sharp decline in tandem with other risk assets. After hitting an intraday high of nearly US$88,000 less than 24 hours ago, Bitcoin plunged to a low of US$81,300—a drop of more than seven per cent—before recovering slightly to trade around US$83,000 as of this writing. The sell-off reflects broader market dynamics, as investors pull back from speculative assets in favour of safer bets.

Ethereum, the second-largest cryptocurrency by market cap, has also struggled. After failing to hold above the US$1,850 level, ETH dipped as low as US$1,751 and is now consolidating below the US$1,820 mark and its 100-hourly simple moving average. Technical indicators suggest resistance near US$1,840, with a bearish trend line forming at US$1,810 on the hourly chart. For Ethereum to mount a meaningful recovery, it would need to break through these levels and push toward US$1,880, but the current market mood makes that a tall order.

In my opinion, Ethereum’s performance is critical to sparking a broader crypto bull market—carries significant weight given its central role in the digital asset ecosystem. Ethereum remains the backbone of decentralised finance (DeFi), powering a vast array of applications from decentralised exchanges (DEXs) to non-fungible tokens (NFTs). Recent data underscores its resilience: in March 2025, Ethereum reclaimed its position as the leading blockchain for DEX trading, overtaking Solana with a trading volume of US$64 billion compared to Solana’s US$52 billion.

Platforms like Uniswap and Curve Finance have driven this surge, reinforcing Ethereum’s dominance even as it grapples with challenges like a historically low ETH burn rate and declining transaction fees following the implementation of EIP-1559. The drop in the burn rate has led to an increase in ETH’s total supply, raising concerns among some investors about inflationary pressures within the network. Yet, Ethereum’s ability to hold its ground amid these headwinds speaks to its enduring strength and adaptability.

Solana’s fading momentum in the DEX space, meanwhile, highlights the shifting tides in the crypto market. The hype around Solana-based meme coins, which fuelled much of its trading volume on platforms like Raydium and Pump.fun, has dissipated, allowing Ethereum to reassert its supremacy.

This resurgence is a testament to Ethereum’s robust infrastructure and developer community, which continue to innovate despite high gas fees and scalability concerns. For a bull market to take hold, Ethereum would indeed need to lead the charge, setting the tone for smaller altcoins and driving renewed investor confidence.

However, the current macroeconomic environment—marked by Trump’s tariffs, a faltering US economy, and a risk-off sentiment—poses a formidable obstacle. If Ethereum can break through its technical resistance levels and capitalise on its DeFi leadership, it could spark the kind of momentum you envision. But for now, the broader market’s woes are keeping a lid on that potential.

Stepping back, the implications of Trump’s tariff measures extend far beyond the immediate market reaction. The US has long prided itself on economic exceptionalism, underpinned by robust growth, a strong dollar, and a dominant position in global trade.

Yet, this latest policy risks unraveling that narrative. Higher tariffs could disrupt supply chains, erode corporate profits, and alienate trading partners at a time when geopolitical tensions are already running high. The flight to haven assets suggests that investors are bracing for a prolonged period of uncertainty, and the upcoming US jobs report will be a critical litmus test.

A weak report could amplify recession fears, prompting the Fed to accelerate rate cuts—a move that might cushion the blow to stocks and crypto but could further weaken the dollar. Powell’s speech will also be pivotal, as markets look for any hint of how the central bank plans to navigate this tariff-induced storm.

In my view, the markets are at a crossroads. The tariff announcement has exposed vulnerabilities in the global economy that were previously masked by optimism about US growth and technological innovation. While defensive assets like gold and Treasuries may offer short-term refuge, the longer-term outlook hinges on how businesses and consumers adapt to higher costs and slower growth.

For risk assets like stocks and cryptocurrencies, the path forward looks treacherous, but opportunities could emerge if the Fed steps in decisively or if the tariffs are scaled back under political pressure. Ethereum’s role as a crypto bellwether adds another layer of intrigue—its ability to rally despite these headwinds could indeed signal a turning point for the digital asset space.

“For now, though, caution reigns supreme, and the world is watching closely as this high-stakes drama unfolds.” — Anndy Lian

 

Source: https://e27.co/global-markets-reel-as-trump-tariffs-slam-stocks-and-bitcoin-prices-20250404/

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”.

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How upcoming CPI data could influence fed policy and cryptocurrency prices

How upcoming CPI data could influence fed policy and cryptocurrency prices

Key points:

– Federal Reserve’s Caution: The Fed, led by Powell, holds rates steady, awaiting CPI data. Strong labor market and slightly high inflation delay rate cut expectations to mid-year.
– Market Shifts: US Treasuries sold off; 10-year yields hit 4.54%, 2-year at 4.28%. US Dollar Index fell 0.3%, gold steady at US$2,900/oz. Consumer staples up 0.9%, Asian markets down.
– Energy Risks: Brent crude rose 1.5% after US inventory increase, but sanctions on Russian oil exports add geopolitical uncertainty.
– Crypto Challenges: Bitcoin at US$97,053.0, down slightly due to tariffs, CPI wait. High US rates pressure crypto; World Liberty Financial’s token reserve aims to stabilize.
– Investment Outlook: Fed caution, trade disputes boost gold, consumer staples. Cryptocurrencies resilient, CPI data key for future strategies.

I watched closely monitoring the global economic landscape and the recent developments, particularly the Federal Reserve’s cautious approach to monetary policy, which provided a compelling narrative regarding the nuanced relationship between central bank decisions, investor sentiment, and the burgeoning sector of digital currencies.

On February 12, 2025, the atmosphere surrounding global risk was notably cautious, a direct consequence of Federal Reserve Chair Jerome Powell’s recent comments suggesting a period of patience before further interest rate reductions would be considered. This stance has set the stage for investors now eagerly awaiting the release of the upcoming Consumer Price Index (CPI) data, which could offer critical insights into inflation trends, potentially influencing the Fed’s next steps in monetary policy.

The Federal Reserve’s choice to maintain current interest rates is a calculated move, aiming to observe more concrete advancements in reducing inflation before taking action. This decision is set against a backdrop where the labor market remains strong, and inflation, while trending downward, still slightly exceeds the Fed’s target.

It’s understandable, therefore, that market participants have adjusted their forecasts, now anticipating a potential rate cut, perhaps not until mid-year. This shift in expectation was reflected in market movements on Tuesday, where US Treasuries saw a sell-off across various maturities, with the yield on the 10-year Treasury note increasing by 3.9 basis points to 4.54 per cent and the two year note by 0.9 basis points to 4.28 per cent. These yield changes indicate that while money markets still anticipate one rate cut by the Fed this year, the timing has become less certain.

The US Dollar Index experienced a modest decrease of 0.3 per cent, signalling a consolidation phase as the market absorbs the implications of the Fed’s policy direction. Traditionally viewed as a refuge during times of uncertainty, gold held steady near US$2,900 per ounce, demonstrating its resilience despite the Fed’s indication of no immediate rate adjustments.

In the energy market, Brent crude oil prices found stability, rising by 1.5 per cent after reports highlighted a significant increase in US crude inventories. However, this stability was somewhat tempered by US sanctions impacting Russian oil exports, introducing an element of geopolitical risk into the equation.

In the equity markets, the MSCI US index concluded the day unchanged, with the consumer staples sector leading the pack with a 0.9 per cent gain, suggesting a move towards sectors considered less volatile in uncertain economic times. Conversely, Asian stock markets started the day on a lower note, indicative of broader global economic concerns, while US equity futures suggested a flat opening, reflecting an indecisive market sentiment.

Shifting the focus to the cryptocurrency sector, Bitcoin, the leading digital currency, saw a slight decrease, trading at US$97,053.0 by mid-morning. This minor decline continues a trend of subdued performance, influenced by the ongoing trade tensions sparked by tariffs from President Donald Trump and the anticipation of the forthcoming inflation data.

Since last week, when concerns about a global trade war escalated due to China’s retaliatory tariffs and Trump’s subsequent tariffs on steel and aluminium, Bitcoin has been confined to tight trading ranges, signalling investor hesitance. The market’s attention is now fixed on the imminent CPI data release, which could provide clarity on the Federal Reserve’s future rate decisions, particularly after its hawkish posture in December.

This cautious environment has somewhat offset the previous optimism that had propelled Bitcoin to a peak above US$108,000, driven by hopes of a more crypto-friendly regulatory environment under Trump.

A recent article by Reuters indicated that the Federal Reserve might postpone additional rate cuts until the following quarter, driven by concerns over inflation potentially rising due to recent trade policies. Economists, who had previously forecasted a rate cut in March, have revised their predictions, suggesting the Fed might adopt a more conservative approach in response to inflation risks.

Elevated US interest rates can have a dampening effect on cryptocurrencies by diminishing the allure of riskier investments, increasing the cost of holding non-interest-bearing assets like Bitcoin, and bolstering the US dollar, which typically exerts pressure on crypto valuations.

In an interesting development, World Liberty Financial (WLF), a new platform in the cryptocurrency space with a financial interest from President Donald Trump, announced the launch of a strategic token reserve. This initiative is designed to support Bitcoin, Ethereum, and other cryptocurrencies, positioning them as pivotal in the transformation of global finance.

WLF’s statement on X highlighted that this reserve would help in mitigating market fluctuations, enable investments in cutting-edge decentralised finance projects, and establish a robust financial reserve. Furthermore, WLF plans to forge strategic alliances with financial institutions to enhance its reserve with tokenised assets.

From my perspective, this cautious economic climate presents a complex scenario for investors. The Federal Reserve’s deliberate approach, combined with uncertainties arising from international trade policies, creates an environment where traditional safe-haven assets like gold and sectors like consumer staples gain traction.

However, initiatives like WLF’s strategic token reserve could signify a maturation in the cryptocurrency market, offering stability against volatility and encouraging innovation in decentralised finance, potentially offsetting some negative impacts of higher interest rates on digital currencies.

Moreover, the ongoing trade disputes highlight the necessity for alternative financial systems, which cryptocurrencies are well-poised to fulfil. Despite its recent subdued performance, Bitcoin’s resilience in facing macroeconomic pressures is noteworthy. It continues to act as a hedge against inflation and currency devaluation, especially in a global economy where traditional financial policies might struggle under geopolitical strains.

In summary, as we approach the release of the CPI data on February 12, 2025, the financial markets are in a state of watchful anticipation, balancing between conventional economic indicators and the potential of digital currencies.

The Fed’s cautious stance, alongside geopolitical manoeuvres, crafts an investment landscape that demands vigilance, flexibility, and an openness to the evolving story of global finance, where cryptocurrencies might increasingly play a significant role. This intricate relationship between policy decisions, market sentiment, and technological innovation continues to redefine investment strategies, presenting both challenges and opportunities.

 

Source: https://e27.co/how-upcoming-cpi-data-could-influence-fed-policy-and-cryptocurrency-prices-20250212/

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”.

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As crypto prices climb, experts stay cautious

As crypto prices climb, experts stay cautious

Fear of recession in the West, surging inflation, rising interest rates and the geopolitical crisis continue to drive extra short-term volatility in the crypto market, and investors would adopt a wait-and-watch attitude

After being in the red for over a month, cryptocurrency markets have pared some of their losses and are trading up about 10 percent over the last week.

Global cryptocurrency market capitalisation also briefly reclaimed the $1 trillion mark.

The world’s largest digital currency by market cap, Bitcoin (BTC), is above the psychological level of $21,500, up 10 percent for the week and up 5 percent on Friday alone.

The second-largest digital currency, Ethereum (ETH) is up 15 percent for the week, trading around the $1,220 level, and a rise of around 3 percent on Friday.

Other major cryptocurrencies like Binance coin, Solana, Shiba Inu, and Ripple’s XRP have gained 10 percent, 11 percent, 7 percent, and 5 percent respectively in the past week.

Anndy Lian, Chief Digital Advisor of the Mongolian Productivity Organization, said BTC rallying together with US stocks was a cause of concern and the rally may be shortlived.

Investors should watch the US jobs report on Friday closely in the short term and until something concrete is set in stone, should not drop their guard, Lian said.

“Also bearing in mind that BTC is still down by around 70 percent from its all-time high and 50 percent lower in 2022. The short-term bull is not sustainable. The threat of more deleveraging is still a key concern for crypto. The global economic uncertainties and risks remain high. A wait-and-see mindset would be more suitable at this point in time,” Lian said.

Raj Kapoor, founder of India Blockchain Alliance, a think-tank, said BTC’s price rose thanks in part to a stock market rally following the release of the Federal Reserve’s minutes and cautioned that while prices have rebounded, the crypto market has not hit the bottom yet and crypto prices can be expected to drop further over the coming weeks or months.

“There are several reasons – starting off from bearish crypto headlines that continue to drag down bitcoin below key technical levels, intermittent talk of recession, many crypto deals falling apart. To add to that surging inflation, geopolitical crises, and rising interest rates continue to drive extra short-term volatility in the crypto and stock markets.  The crypto market has continued to move in tandem with the stock market in recent months, which makes it even more intertwined with global economic factors,” Kapoor said.

Crypto exchange Kraken’s Dan Held argued that the “mass contagion” of the domino effect of one cryptocurrency over the other seems to have been “contained” by FTX crypto exchange, whose CEO Sam Bankman-Friend recently said he and his company still had a “few billion” on hand to shore up struggling firms that could further destabilize the digital asset industry.

He added that crypto lending firm Celsius paid off all its outstanding loans for BTC, bankruptcies have already been filed and inflation fears are cooling off.

 

 

Original Source: https://www.moneycontrol.com/news/business/as-crypto-prices-climb-experts-stay-cautious-8799711.html

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”.

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