Here's a heart-wrenching truth:
◼︎ BTC has only returned to the level before Trump raised tariffs.
◼︎ However, neither ETH nor the total market value of cryptocurrencies has reached the level of February 1.
➤ BTC market has been repaired
On February 1, Trump signed an executive order to raise tariffs on China, Canada, and Mexico. From February to April, Trump raised tariffs multiple times. Until April 10, when Trump suspended most tariff measures, BTC began to rise.
It seems that the big surge in May was merely a recovery from the impact of tariffs.
➤ ETH and the overall cryptocurrency market have yet to recover
Under the influence of the Pectra upgrade, ETH has only returned to the level after the first wave of decline in February.
The total market value of cryptocurrencies is still $931.8 billion short of February 1.
➤ Stablecoins are growing
The good news is that the market value of stablecoins is rising, having increased by $19.12 billion since February 1.
However, at this stage, the use of stablecoins is no longer limited to the cryptocurrency circle.
More capital needs to flow into stablecoins to initiate a bull market. Therefore, after a period of interest rate cuts, preferably QE, can bring sufficient liquidity.
Liquidity is a necessary but not sufficient condition for a bull market.
➤ Don't be too optimistic about tariffs and interest rate cuts
❚ Trump may still want to raise tariffs
First, let's talk about tariffs. Trump may genuinely want to raise tariffs; he wants to bring manufacturing back. It may not necessarily be to create jobs for American workers, or even for national income.
One must understand that a country's manufacturing sector is always a key industry. The simplest example is that in January 2020, the U.S. monthly production capacity for N95 masks was only 45 million, which some analyses suggest is less than 10% of China's.
Even with advanced technology, the U.S. needs to maintain a certain manufacturing capacity to respond to various changes in demand, especially sudden changes.
Therefore, it's speculated that Trump may still want to appropriately raise tariffs on various countries.
❚ Interest rate cuts may still need to wait
The impact of tariffs on inflation and the economy is very complex.
The U.S. imports more than it exports; raising tariffs and retaliatory tariffs by other countries may have a more direct impact on inflation than on recession.
However, raising tariffs will drive prices up. Rising prices will suppress domestic consumption and exacerbate recession.
On the other hand, recession reduces production and consumption, which can help curb inflation.
So, will Trump raise tariffs on countries other than those in East Asia? What impact will raising tariffs have on inflation and the economy?
It's hard to predict; the Federal Reserve's policies have always had a lagging effect. We need to observe the upcoming policies, inflation, and economic changes before making decisions.
So, when the Federal Reserve will cut interest rates still needs observation for a while. The dot plot in June may still not have a conclusion.
➤ Written at the end
If ample liquidity appears in the second half of 2025 or even the first half of 2026, it could 'encounter' the sentiment of the cryptocurrency market.
Don't underestimate the first half of 2026; the sentiment after a bull cycle won't immediately dissipate. In the first half of 2018, EOS and TRON went live, and Stepn emerged in the first half of 2022.
It's hard to have a bull market before interest rate cuts, let alone a meme coin season.
Recently, even if Trump raises tariffs again, it probably won't be as extreme as in April. Even if the Federal Reserve's dot plot in June isn't optimistic, it's possible to stop balance sheet reduction. Therefore, a black swan event is unlikely.
[Don't believe Bee Brother here; he has always been inaccurate in the short term] Before a bull market, if there are no black swans, my personal judgment is that it will primarily be a period of turbulence, similar to the waiting phase from March to September last year when everyone was expecting interest rate cuts.
