Global financial markets experienced severe turmoil this week as trade tensions between the United States and China escalated, triggering panic selling in stocks and cryptocurrencies, according to an analysis released on April 7 by QCP Capital.
Volatility on the rise, tariffs on the rise: QCP says the world is approaching the point of economic collapse.
On Monday, the firm reported that Bitcoin initially resisted last week's stock market decline but collapsed during early trading hours in Asia, falling 7% to $74,500. More than $800 million in derivatives positions in Bitcoin and Ethereum were liquidated in the space of 24 hours as volatility spiked. QCP Capital noted that Bitcoin's implied volatility jumped to more than 85% on Friday, while Ethereum's jumped to 130%, reflecting frenzied hedging activity.
The CBOE Options Volatility Index, a key fear gauge, crossed the 60 level, indicating heightened investor anxiety. China's stock market suffered its worst single-day collapse since 2008, a delayed response to Beijing's retaliatory tariffs of 34% on all US goods announced on Friday. With the higher tariffs set to take effect on April 9, QCP warned that the global economy was approaching an "all-out economic war."
President Trump acknowledged the market pain but defended his strategy, saying, "Sometimes you have to take medicine," according to a QCP summary. More than 50 countries have reportedly requested emergency trade negotiations with the United States to mitigate supply chain disruptions. Meanwhile, the $800 million cryptocurrency selloff marked one of the largest single-day selloffs this year, according to QCP data.
While traditional safe havens like gold and bonds have surged, QCP highlighted Bitcoin's unusual balance with stocks during the crisis. The firm emphasized that market confidence and the reliability of the US economy are now at stake, with little time left to avoid further instability before the tariff deadline on Wednesday. Analysts warned that without tangible progress in the negotiations, global markets could experience intense volatility in the coming days