Translated by: Blockchain Plain Language

President Donald Trump announced earlier this week tariffs of 10% on the UK and 49% on Cambodia, stating that these tariffs would raise trillions of dollars for the US economy and "make America wealthy again". In the past day, articles about whether these tariffs would lead to an economic recession, their impact on the US economy, and how China might respond have been widespread.

Given the market uncertainty and the massive losses in all financial markets within a day of the announcement, does this provide an opportunity for cryptocurrencies?

01 Cryptocurrencies as a Hedge Asset

Cryptocurrencies were initially viewed as a hedge and hedging tool for traditional financial assets, but recently they have proven not to be a good hedge asset and can only serve as a weak hedging tool during financial market downturns. As a result, the correlation between cryptocurrencies and stocks and bonds has been increasing.

Given the tariff news and the resulting economic uncertainty, investors may seek refuge in Bitcoin (and other cryptocurrencies) as they did during times of high market uncertainty in the past. Zach Pandl, Research Director at Grayscale, noted: "I believe the tariffs will weaken the dominance of the US dollar, creating space for competitors, including Bitcoin. Prices may drop in the short term. But the first few months of the Trump administration have enhanced my long-term confidence in Bitcoin as a global monetary asset."

Bitcoin, with its deflationary nature and predictable supply, often labeled as "digital gold", may be seen by investors as a safe way to hold wealth during periods of extreme economic and political uncertainty.

02 Market Activities

In recent months, many cryptocurrency companies have been seeking to go public. The US stablecoin issuer Circle (issuing USDC) has submitted an S-1 form to the SEC on Tuesday, planning to list with the stock ticker "CRCL".

USDC Stablecoin Issuer Circle Applies for Listing

Circle Internet Group, the company issuing the widely popular USDC stablecoin, has submitted an S-1 form to the SEC, preparing for an initial public offering. The company plans to issue stocks on the New York Stock Exchange with the ticker "CRCL", as the documents show. JPMorgan will serve as the lead left-side active bookrunner, while Citigroup will serve as the lead right-side active bookrunner, according to Tuesday's statement. Bookrunners act as underwriters during IPOs or when banks and other institutions issue new financial products...

The company reported in late 2024 that its stablecoin business reserve revenue reached $1.7 billion. Additionally, Ripple, Kraken, and Gemini are reportedly also considering IPOs, indicating that many in the industry believe now is the time to go public, issue stocks, develop, and integrate more deeply into the traditional financial system.

Moreover, the price trend over the past year has been positive. When Donald Trump was re-elected as US President in November, Bitcoin initially surged to a historic high of over $75,000, later reaching a peak of over $109,000 in January. However, in recent months, Bitcoin's price has fallen back, currently hovering around $80,000.

Institutional investors continue to be attracted to cryptocurrencies, especially since the launch of Bitcoin spot ETFs in January 2024. According to an Ernst and Young survey from early 2025, 89% of institutional investors plan to increase their exposure to digital assets in 2025, with 59% allocating over 5% of their portfolio to digital assets. This is a significant proportion, with 68% of respondents saying they would immediately purchase if a regulated ETF for Solana or XRP is listed.

Furthermore, according to DefiLama data, the stablecoin market continues to grow, with a total scale exceeding $230 billion. Therefore, the cryptocurrency market shows no signs of slowing down, with activities still in full swing.

Regulatory Clarity

Since cryptocurrencies became mainstream in 2008, they have lacked regulatory clarity. The previous government, including then-SEC Chairman Gary Gensler, regulated cryptocurrencies through enforcement actions, such as high-profile cases involving Coinbase and Ripple Labs.

Gensler took approximately 100 enforcement actions against cryptocurrencies during his nearly four-year tenure as SEC Chairman. However, many in the industry believe that regulating through enforcement is ineffective, and the SEC needs to provide more guidance and a robust regulatory framework, collaborating with the cryptocurrency industry.

Washington's Cautious Attitude

Crypto Legislation May Liberate the Industry from SEC Regulation - But Critics Warn This is a Pandora's Box

As crypto-related bills rapidly advance in Congress with a target to pass by August, the potential impacts of these legislations are just beginning to become clear. For example, one bill will seek to modify the fundamental US securities law, formally excluding most crypto assets from the definition of "securities" - a bold move with almost no precedent in congressional history, at least since these laws were established during the early New Deal era...

The Financial Innovation and Technology for the 21st Century Act (FIT) passed in May 2024 provided some market clarity, despite being against the wishes of SEC Chairman Gensler. Trump stated during his 2024 campaign that if elected, he would "fire SEC Chairman Gary Gensler on the first day". Although Trump did not fulfill this promise, Gensler resigned in January 2025 after seeing the situation was unfavorable.

Since then, the SEC's attitude towards cryptocurrencies has become quite positive, with SEC Commissioner Hester Peirce publicly supporting the market and establishing a crypto task force dedicated to integrating the industry into the market. Regulatory clarity has long been seen as the biggest obstacle to widespread cryptocurrency adoption, and with clarity potentially imminent, this can only be good news for the market.

03 Strategic Bitcoin Reserve

One of the most interesting, or perhaps most unlikely, events during the early Trump administration was the announcement of establishing a strategic Bitcoin reserve. On March 2nd, Trump announced that this reserve would include Bitcoin, Solana, Cardano, Ripple, and Ethereum, aimed at making the US the "world's crypto capital" and supporting industry growth.

The executive order signed on March 6th officially established this reserve, funded by Bitcoin and non-Bitcoin digital assets already seized by the Treasury Department. While the US government currently has no plans to purchase more digital assets to fund this reserve, the fact that the US government is using it as a reserve can only be seen as a positive signal to the market.

US May Sell Gold, Use Fiscal Funds to Establish Bitcoin Reserve: Standard Chartered Bank

Standard Chartered Bank analyst Geoff Kendrick suggested that the US government could purchase Bitcoin through several budget-neutral methods while implementing the latest executive order by President Donald Trump to establish a strategic Bitcoin reserve on Thursday...

However, like any market, predicting cryptocurrency market trends is futile. As Isaac Newton said, you can "calculate the motions of celestial bodies, but cannot calculate human madness".

Pandl believes that Bitcoin will set a new historical high this year, and given the activity in the cryptocurrency ecosystem and the financial and political uncertainties, the coming year will undoubtedly be full of highlights for cryptocurrencies.

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