Recently, the global economic situation has been turned upside down by a series of actions from the Trump administration. After Trump took office again, the economic policies became increasingly perplexing, especially the 'reciprocal tariff' policy introduced on April 2, which was like a heavy bomb, causing waves in the global trade market. It is said that the mastermind behind this is Stephen Miran, Chair of the White House Council of Economic Advisers and economist. The 'Miran Report', created in November 2024, is viewed as the 'secret weapon' behind Trump's series of economic policies. On April 7, 2025, the White House website published his latest speech defending the 'reciprocal tariffs', revealing the hidden 'calculations' behind it. Let's continue to explore.
Who would have thought that this tariff policy could change so quickly? Early this morning, Trump announced that, given that over 75 countries are actively discussing trade, currency, and tariff-related matters with the U.S., he decided to give these countries a 90-day 'suspension period' for tariffs, during which tariffs would be drastically reduced to 10%. Yet he immediately imposed heavy tariffs on China, directly increasing them to 125%. This 'divine operation' caused the U.S. stock market and cryptocurrency market to surge dramatically.
Let's first take a look at the cryptocurrency market's crazy performance. OKX's real-time data shows that this morning around 8 a.m., BTC surged through various thresholds, reaching a peak of over $83,500, currently reported at $82,600, with a 24-hour increase of 8.23%.$BTC The surge is fierce,$ETH and it is not to be outdone, with a peak breaking $1,680, currently reported at $1,670, with a 24-hour increase of 13.27%.$SOL It briefly broke through the $120 mark, now reported at $119, with a 24-hour increase of 12.60%. Other major altcoins are also showing impressive increases; among the top 100 cryptocurrencies by market capitalization, HYPE has broken through $14, with a 24-hour increase of 25.9%, currently reported at $14.01; S has broken through $0.5, with a 24-hour increase of 24.9%, currently reported at $0.5002; PEPE has broken through $0.000007, with a 24-hour increase of 17.5%, currently reported at $0.00000702. The total market value of cryptocurrencies has also risen with this wave of market movement, with CoinGecko data showing it has surpassed $2.7 trillion, with a 24-hour increase of 6.2%. However, in the derivatives market, it's a bit of a mixed bag; Coinglass data shows that over the past 24 hours, $589 million worth of positions have been liquidated across the network, including $214 million in long positions and $375 million in short positions. Looking at individual cryptocurrencies, BTC had liquidations of $235 million, and ETH had liquidations of $167 million.
Looking at the U.S. stock market, as of the close of trading, the three major indices experienced a remarkable 'surge'. The Dow closed up 7.87%, marking the largest single-day gain since March 24, 2020; the S&P 500 closed up 9.52%, the largest single-day gain since October 28, 2008; the Nasdaq closed up 12.16%, the largest single-day gain since January 3, 2001, ranking second in historical gains; the Russell 2000 closed up 8.66%, also marking the largest single-day gain since March 24, 2020.
Although the market has experienced a surge due to the suspension of tariffs, most people are aware that this may only be a temporary 'breather', and cautious sentiments continue to pervade every corner of the market. As soon as Trump's latest tariff policy was announced, traditional financial analysts rushed to express their opinions.
U.S. Senate Minority Leader Chuck Schumer bluntly stated that the government under Trump's leadership is in complete disarray, with policies changing constantly and advisors arguing incessantly. Such a cabinet is incapable of effectively governing the country, and Trump seems to be playing a game of 'red light, green light', treating the U.S. economy as a joke.
John Carnavan, chief analyst at Oxford Economics in New York, also remarked that from Trump's wording, it is unclear whether the tariffs have truly been suspended or merely reduced to 10%. Nonetheless, Trump has indeed abandoned some of the most severe tariff threats, which is a positive signal for risk assets, but the uncertainty surrounding tariff policies has not diminished.
Chief Market Strategist Steve Sosnick from Interactive Brokers also said that Trump's suspension of tariffs came too suddenly. Previously, the U.S. government had insisted that it would not cancel tariffs. Now, businesses are unsure how to plan for the future. While uncertainty has decreased somewhat, it has not disappeared entirely.
Amarjit Sahota, Executive Director of FX, was even more direct, stating that the 90-day suspension of tariffs is a 'bad idea' that will only bring more uncertainty. This policy is either a decision-making error or poorly planned and executed.
Mark Hackett, Chief Market Strategist at Nationwide Investment Management Group, reminds everyone that Trump's suspension of tariffs is good news, indicating progress in negotiations. However, the Nasdaq index rose 8% within 20 minutes, which is as unhealthy as a drop of 8%, so caution is advised.
So, what will happen next in the cryptocurrency market? Let's hear what experts have to say.
Arthur Hayes, co-founder of BitMEX, pointed out that the current policy response is unexpected, and the key issue is whether China will retaliate. He also suggested that investors closely monitor the People's Bank of China's adjustment of the yuan exchange rate this Thursday, as it may provide insights into the next market direction.
Crypto analyst Ali Martinez believes that BTC is breaking through its consolidation range, and if it can hold the support level of $80,700, it has a good chance of advancing towards $84,000 or even $87,000.
Blockchain analysis platform Santiment's analysts indicated that while the 'suspension of tariffs' is a positive message that temporarily eases market tensions, it is merely a stopgap measure. Forty-eight hours ago, the market experienced a 'buy the rumor, sell the fact' scenario due to a false report about the suspension of tariffs, followed by the U.S. announcing significant tariffs on Chinese goods, leading to overwhelming disappointment in the market. The market fundamentals remain unclear, largely supported by public greed and fear. The excessive reaction to tariff news has become an important signal in the market.
Zach Pandl, head of Grayscale Research, suggested that tariffs could trigger stagflation shocks, which would be unfavorable for traditional asset returns but could be positive news for scarce commodities like gold and possibly Bitcoin.
Speaking of which, let's delve deeper into the speech made by Stephen Miran, Chair of the White House Council of Economic Advisers, at the Hudson Institute event. He stated that the U.S. provides what economists call 'global public goods' to the world. On one hand, the U.S. provides a security umbrella, allowing the world to exist in a relatively peaceful era; on the other hand, it offers the dollar and U.S. Treasury bonds, supporting the prosperity of global trade and financial systems. However, the U.S. has paid a heavy price for this: in defense, soldiers risk their lives to safeguard national and global security, while American citizens bear high taxes; in finance, the dollar's reserve function distorts the currency market, compounded by unfair trade barriers from other countries, leading to trade deficits that severely undermine American manufacturing and working-class families.
For example, when two foreign institutions trade in dollars, their savings exist in the form of dollar-denominated securities, mostly U.S. Treasury bonds, which means that Americans are paying for global peace and prosperity. After Trump took office, he clearly stated that he would no longer let other countries 'take advantage' of the U.S., aiming to readjust defense and trade relations, rebuild the U.S. industrial base, and seek trade conditions favorable to American workers and businesses. From an economic perspective, the traditional international trade model assumes that trade deficits will automatically correct themselves, which does not hold true for the U.S. As the issuer of the global reserve currency, the U.S. has had a current account deficit for fifty years, which has only grown larger, yet the dollar has not depreciated; in fact, it has appreciated. Recent economic analyses suggest that by imposing tariffs, the U.S. can improve its economic situation and increase fiscal revenue, and even if retaliatory measures are taken, the countries subject to tariffs could suffer significant losses.
Take the period from 2018 to 2019, for example; China bore the cost of Trump's tariffs through currency depreciation, which led to a decrease in purchasing power among the Chinese people, while the tariff revenues were used for tax cuts in the U.S. This time, tariffs will also support tax cuts and reduce the fiscal deficit in the U.S., stimulating economic prosperity. However, the imposition of tariffs is not solely about money; it also aims to address issues such as tariff and non-tariff barriers, unfair competition, and to improve U.S. export competitiveness.
This tariff war has long transcended mere economic and trade issues. Essentially, it involves ideological differences and even security-related games. In terms of camp divisions, aside from the two major players, the U.S. and China, there is also 'party C'. Party C can be further divided: C1, like Europe and Canada, has significant economic and trade interests with both China and the U.S. and competes with the U.S. in economic and ideological terms; C2, like Japan and South Korea, seeks to avoid offending either side and hopes to benefit from both; C3, like Mexico, India, and Vietnam, shares economic competition with China in the same ecological niche and also wishes to 'gain advantages' from both sides.
The key to this escalating dispute lies in China's need to obtain a surplus from the U.S. to address some of its own issues, and its confidence in cooperating with 'party C' to counter U.S. tariff increases. Party C also has economic problems and relies on support from both China and the U.S., so it reaches a tacit agreement with China to jointly resist the U.S. Although Parties B and C are not as resolute, they must play along for the sake of domestic interest groups. However, subsequent issues involving the exclusion of third-party intermediaries will depend on how the U.S. negotiates with these countries. Currently, Trump is most eager to ally with Party C.
In this complex situation, market trends are elusive. Regarding the cryptocurrency market, we previously believed that the bull and bear cycles of the crypto ecosystem are related to Bitcoin halving. Historically, after Bitcoin's halving in 2016, a bull market ensued in 2017, and the Ethereum ecosystem also saw a bull market due to the ICO boom. After Bitcoin's halving in 2020, both Bitcoin and the crypto ecosystem experienced another bull market in 2021. However, a deeper analysis reveals that Bitcoin's bull market may be directly related to halving, while the bull market of the crypto ecosystem is largely due to innovations in applications, scenarios, and models within the Ethereum ecosystem. After the Bitcoin halving in 2024, new price highs could emerge, but the Ethereum ecosystem has not shown similar strong innovations, nor has its price broken through previous highs. This serves as a reminder that we need to analyze the trends and cycles of Bitcoin and the crypto ecosystem separately. To assess Bitcoin's bull and bear phases, one can refer to halving, while the cycle of the crypto ecosystem requires attention to innovative applications, scenarios, and models within the ecosystem.
Since the U.S. announced its new tariff policy on April 2, global asset prices have dropped significantly. It was only today, with Trump's announcement of the suspension of tariffs (except for China), that things began to warm up again. During this time, Bitcoin's decline was relatively limited when adjusted for risk. If the correlation between Bitcoin and the stock market were 1:1, the S&P 500's drop should have caused Bitcoin to fall by 36%. However, Bitcoin only dropped by 10%, indicating that holding Bitcoin can provide diversification benefits to an investment portfolio.
In the short term, the direction of global markets will likely depend on trade negotiations between the White House and other countries. If negotiations go smoothly and tariffs are reduced, the market may continue to rise. However, if negotiations falter, more retaliatory actions could lead to market volatility. Traditional markets are highly volatile, and the future trajectory of trade conflicts is hard to predict. Investors in this high-risk environment need to adjust their positions cautiously. However, the volatility of Bitcoin prices has increased far less than that of stocks, and speculative traders in the cryptocurrency market hold relatively low positions. If macro risks ease in the coming weeks, the market value of cryptocurrencies is expected to rebound.
In the long run, tariffs and trade tensions may drive the adoption of Bitcoin. Tariffs can lead to 'stagflation', impacting the demand for dollars. If trade flows with the U.S. decline, the demand for dollar transactions will decrease. If tariffs provoke conflicts with other countries, the demand for the dollar as a store of value will also weaken. Currently, the dollar's share in global foreign exchange reserves far exceeds its share in global economic output. Trade tensions may prompt countries to accelerate the diversification of their foreign exchange reserves, with some central banks already exploring investments in Bitcoin.
In American history, Nixon announced a comprehensive 10% tariff on August 15, 1971, and ended the dollar's convertibility into gold, leading to the depreciation of the dollar. Now, Trump's tariff policy could also lead to a continued weakness of the dollar. It is expected that U.S. government policies in the next 1 to 3 years will weaken the dollar and keep inflation above target. While tariffs may slow growth, measures such as tax cuts, deregulation, and dollar depreciation could offset some of the impacts. Historical experience shows that sustained inflationary pressures are beneficial for scarce commodities like Bitcoin. Coupled with the White House's supportive policies for the digital asset industry, the future widespread adoption of Bitcoin is highly likely.
Currently, the uncertainty surrounding tariff issues still hangs over the market like the 'Sword of Damocles.' In response to the U.S. raising tariffs, China is also brainstorming strategies, such as strengthening cooperation with Iran, Russia, Africa, parts of the Middle East, and North Korea, to build a renminbi settlement system. Regardless of how the market changes, we investors must remain clear-headed, rationally view market fluctuations, and avoid blindly following trends. After all, in this complex and changing economic situation, caution is the 'magic weapon' to preserve wealth.
