U.S. President Donald Trump recently announced a 90-day suspension of new tariffs on imported goods from most countries but raised import tariffs on China to 125%. This decision had a significant impact on global financial markets, drawing considerable attention, especially in the cryptocurrency sector.
Reactions of Financial Markets
Following Trump's announcement to suspend new tariffs, global stock markets experienced significant volatility. The S&P 500 index saw one of its largest single-day increases since World War II, rising by 5.6%; the Nasdaq index also rose by over 8%. However, this optimistic sentiment did not last, and a pullback followed. For example, the Wall Street market, after a historic rise, indicated a reversal of some gains, with S&P 500 futures dropping by 1.7%.
Performance of the Cryptocurrency Market
The cryptocurrency market's response to the trade war was equally intense. After Trump announced the suspension of new tariffs, the price of Bitcoin surged to over $82,000, with other cryptocurrencies like Ethereum, Solana, and XRP also seeing significant increases. However, during the previous escalation of tariffs, Bitcoin and cryptocurrency-related stocks experienced declines. For instance, on April 7, the price of Bitcoin fell to around $76,000, reflecting market concerns over trade tensions.
The Role of Cryptocurrency as a Safe-Haven Asset
During turbulent times in traditional financial markets, cryptocurrencies are viewed as potential safe-haven assets. For example, when the stock market fell due to tariff issues, the price of Bitcoin rose, indicating that investors may see it as a safe harbor. However, this safe-haven characteristic is not stable, and the cryptocurrency market is still influenced by overall market sentiment and policy changes.
Impact of Policies and Regulations
The Trump administration's attitude towards cryptocurrencies has also influenced market trends. The President announced in March the establishment of a strategic cryptocurrency reserve, including Bitcoin, Ethereum, XRP, Solana, and Cardano, aimed at making the U.S. the 'world crypto capital.' This initiative is seen as support for the cryptocurrency industry and may boost market confidence.
Summary
Trump's trade policies have had a profound impact on global financial markets, including the cryptocurrency market. Cryptocurrencies exhibit certain safe-haven characteristics during market turmoil, but their prices remain affected by policy changes and market sentiment. Investors should closely monitor policy dynamics and prudently assess the role of cryptocurrencies in their portfolios.
