In terms of price performance, whether it's the US stock market, gold, or cryptocurrencies, everything is currently detached from fundamentals and driven by Trump's tariff war policy, including potential retaliatory measures from other countries. Bitcoin remains relatively stable amid this chaotic market volatility, fluctuating between $76,000 and $82,000, demonstrating a relatively robust performance. However, there are no signs of a significantly cheaper price range, indicating that investors are still actively positioning themselves in Bitcoin.
VX: TZ7971
Such a largely man-made major event as the tariff war is difficult to predict. However, we'll start by explaining the background, attempting to depict the recent situation development and subsequent script evolution to assist in a more structured layout. Trump announced a 90-day suspension of retaliatory tariffs last week, with the key being the massive sell-off of US bonds, creating a liquidity crisis. Without this pause, both the US dollar and US bonds could potentially collapse. The largest US bond buyers, China and Japan, are reportedly continuously selling, strongly pressuring the US. The short selling by Japan and institutions has temporarily ceased after the tariff suspension, but the US-China confrontation unfortunately entered a cowardly game.
Both sides are shouting in an almost meaningless numerical competition, making the possibility of tariff war cessation even smaller.
Regarding the outcome of this game, investors generally believe China has a higher chance of winning. This is because the public is already accustomed to economic recession, and even if tariffs block US agricultural products, causing domestic price increases, China has already entered a deflationary period. The increased import costs have almost no impact, and the public has a higher tolerance for economic difficulties. The US, however, is different. Facing high prices and economic recession, they will certainly use various methods to pressure Trump to suspend tariffs. Considering the current conditions of both countries, the outcome is already quite apparent.
For example, this trade conflict escalation quickly influenced market and corporate decisions. The Chinese electronics brand Anker has raised prices of about 20% of its products on the US Amazon platform since April 7th, with an average increase of 18%. This demonstrates that companies are beginning to transfer the tariff cost to US consumers, affecting the affordability of consumer electronics. More products are expected to adjust prices in response to tariffs.
Another affected company is Tesla. On April 12th, Tesla stopped accepting new orders for its US-produced Model S and Model X in the Chinese market, reflecting how high tariffs rapidly decrease the price competitiveness of these models in the Chinese market. The tariff effects are still developing, and US citizens will be more significantly impacted. After the 90-day negotiation period, the market will begin to anticipate which countries will obtain better trade conditions and potentially take market share from China. However, this also involves larger tariff bargaining chips, and Bitcoin is the best allocation choice in this situation.
Global Trade Landscape Still Faces Reorganization Crisis, Bitcoin is the Best Allocation Choice
Facing the upcoming negotiation challenges, although currently experiencing market turbulence, it is expected that within these 90 days, the US will negotiate with multiple countries to ultimately establish a new trade order with more "stability and certainty". This "suspension period" will be used to reset negotiation strategies and trade structures.
Simultaneously, the US is actively exploring other trade partnerships. According to official statements, the US and India reached a consensus on the framework of the first-phase trade agreement on April 11th, with expectations to complete negotiations within 90 days. Both sides will conduct close consultations through online and regular meetings.
India points out that compared to other countries, US-India bilateral trade negotiations have "significantly advanced". India has the least Chinese influence, a massive domestic market, and better political relations, expected to be among the first countries to obtain the best economic and trade conditions.
In contrast, China needs to approach other countries to jointly resist the US trade and tariff war. The most efficient method is to rally Southeast Asian countries to join in resisting the US, and these countries are simultaneously threatened by high reciprocal US tariffs, naturally willing to use China as a bargaining chip in negotiations with the US.
On the other hand, Europe is also eyeing these negotiations, with the massive service surplus of tech giants being the EU's biggest bargaining chip.
If negotiations with Trump break down, the EU will impose an advertising revenue tax on US digital tech companies like Meta and Google, expanding the trade war into the service domain. While the EU has suspended retaliatory measures for 90 days, it has activated anti-coercion tools, including taxation on the US's massive service surplus to Europe and potentially restricting European metal scrap exports to the US.
Trump's trade war has altered the global order. The EU refuses to compromise on digital regulations and tax sovereignty, proposing that the US and EU should sign a zero-tariff industrial goods agreement. This indicates that the tariff war is reshaping the global economic system, including the US dollar and US bond fundamentalism. In this situation, if adopting a more aggressive defensive strategy, Bitcoin's value storage characteristics would be one of the best choices. Bitcoin's original invention goal was to resist the US dollar monetary basis, and when the US dollar's status is threatened, Bitcoin will be an excellent defensive tool.
Today's panic index is 31, maintaining a state of panic.
Weekend market liquidity is typically low, but this weekend saw an unexpected small rebound in the crypto market, primarily due to Trump's inconsistent tariff stance. This trend was actually within our expectations. Previously, we mentioned BTC at 7.5 and Ethereum at 1400 having high cost-effectiveness even if not at the bottom. Currently, BTC has risen 13.3% from 7.5-8.5, and Ethereum has risen 14.2% from 1400-1600. If these positions can stabilize, it can basically be declared that this decline has ended. Short-term traders can observe the breakthrough and stabilization of these two positions, ready to exit if the situation looks unfavorable. Long-term investors can hold with confidence.
