When chatting with many OGs, they all lament the unpredictable market changes in the 24/25 years, and many veterans are unable to make money. There is a rather interesting point of view, that 17/18 was a "community-driven market", where the new asset issuance paradigm created a wealth effect; 20/21 was a "technology-driven market", where new asset gameplay (DeFi/Non-Fungible Token) created a wealth effect; 24/25 is a "policy-driven market" (some also call it a "policy bull market", haha), where market changes depend on policy changes.
This article mainly focuses on recent policy-driven events, or in other words, the impact of policy-related public information on crypto prices (mainly discussing the magnitude). As for the meme posted by Trump and his wife, it is not included in this category.
Prior to this, a very important assumption is that people become numb to "continuous" long-term signals (reasons include being smoothed out by various strategies/monitoring, people's perception becoming dull, etc.). For example, if you face the sea every day, over time, your excitement about seeing the sea will decrease, and you may even take it for granted (this is the economic concept of diminishing marginal utility).
Since the approval of the ETF in 2024, in addition to the traditional exchange's trading fees, lending rates, volatility, candlestick charts and other technical indicators, the market will use the daily net inflow/outflow data of the ETF as an important reference indicator for today's price trend. If we consider the net inflow/outflow data of the ETF as public information, how does the market view these data? And will these data significantly affect the price?
Taking ETH as an example, the price of ETH is positively correlated with the inflow/outflow of the ETF (if there is a net inflow the previous day, the probability of the price rising the next day is higher, and vice versa).
The correlation between BTC's price trend and the net inflow/outflow of the ETF is not so obvious, especially after Trump's victory in November, the relevance of this part of the trend prediction has gradually weakened.
Given the relatively straightforward data and readability, this article will not show the regression analysis. Overall, the market's sensitivity to public market information (referring to this kind of intuitive market information) will gradually decrease, but this does not mean that this information is ineffective.
The following summarizes Trump's recent statements (tweets) on tariffs:
February 1, 2025: Trump signed an executive order imposing a 25% tariff on goods from Canada and Mexico, and a lower 10% tariff on Canadian energy imports, effective February 4, 2025.
February 13, 2025: Trump announced a 25% tariff on all foreign steel and aluminum products, to be implemented starting March 12, 2025. From April 2, 2025, "reciprocal" tariffs will be imposed on all foreign imported goods.
March 4, 2025: The tariffs previously announced by Trump on Canada and Mexico officially took effect at 12:01 AM Eastern Time.
March 7, 2025: Trump announced that he will impose new tariffs on Canadian dairy products and lumber, expected to take effect on March 11, 2025. (This day is also the White House Crypto Summit)
March 11, 2025: Trump announced that he will impose an additional 25% tariff (up to 50%) on Canada's steel and aluminum, expected to take effect on March 12. In addition, Trump also demanded that Canada remove its tariffs on U.S. dairy products.
Directly to the data:
Note: One view is that the drop on March 7 may also be related to the market's overly high expectations for "Bitcoin reserves".
The ancient saying goes, once, twice, three times, and it's exhausted. Combining the rise and fall of BTC and ETH at these time points. From the data, the reaction to the tariff topic was the largest on the first (February 1) and third (March 4) occasions, the reaction was smaller on the second (February 13) and fourth (March 7) occasions, and the fifth (March 11) even had an upward trend, but does this mean that the market has become desensitized to Trump's "tariff tricks"?
Analyzing the inflow/outflow of the ETF:
As early as before March 1, BTC ETF had already seen massive outflows, suggesting that traders who were bearish on the market or resistant to tariff volatility had already left, which may explain why the remaining ETF holders are less affected by the tariff issue. After all, those who wanted to withdraw have already left.
Then there is the analysis of March 4 and 7. Although the tariff imposition on March 4 was within market expectations (Trump had said in February that there would be another round of tariff sanctions in early March), the market reaction was more intense due to the impact of the Bank of Japan's interest rate hike, especially the volatility of BTC was even greater than on February 1. The tariff rhetoric on March 7 certainly had an impact, but that day was also the day of the Bitcoin summit + the news of the strategic reserve, and the market's expectation > the actual policy implemented.
Just as people living by the river will ignore the sound of the water, people become numb and indifferent to continuous long-term information, but Trump's tariff issue has not yet reached the threshold of continuous long-term, and the reaction on March 11 may be the appearance of "desensitization", but the deeper reason is more likely that the risk-averse capital has already withdrawn, and the traders left in the market have already priced in the "tariffs".
The market is not numb or desensitized, it is all carefully calculated risks.
So do you still care about what Trump said?
