Is Trade War 2.0 upon us? Let's analyze the impact on the global economy, Bitcoin, and altcoins together.

Hey, crypto enthusiasts, today we're discussing a significant issue—the US's reciprocal tariff policy has officially taken effect! This matter has been brewing since Trump took office. On the morning of April 3rd, the market went haywire, with Nasdaq futures plunging 5%, and Bitcoin briefly dropping to $8,200. This is not a minor event; it feels like an economic H-bomb affecting the global economy. Next, I will take you through how this move will affect the global economy and the crypto sphere.

I. The Impact on the Global Economy: Is Trade War 2.0 Here?

Let's start with the global economy. The reciprocal tariff policy this time is, in simple terms, "tit for tat." The US will impose a 10% base tariff on all regions worldwide starting from April 5th, and from April 9th, impose higher special tariffs on 60 specific regions. This move sounds familiar, right? Yes, it's the same flavor as Trump's trade war back then, only this time it's harsher and more comprehensive. The goal is clear: reduce trade deficits, bring manufacturing back to the US, and incidentally save more money for the treasury.

But it's not that simple! The global supply chain is already as tangled as a spider web; if you tug at one part, another part will get messed up. For instance, major trade partners of the US like China, Mexico, and Canada will probably be in a lot of trouble. Once tariffs are added, export costs will soar, American consumers will have to pay more for goods, and inflationary pressure will rise immediately. Not to mention that other countries might not be willing to show weakness; Canada has already threatened retaliatory tariffs, and the EU is also sharpening its knives, ready to fight back. If this turns into a full-scale trade war, global economic growth will take a hit.

In the short term, the US economy might get some small benefits since tariffs can bring in more money, with an estimated increase of $400 billion, and the return of manufacturing is not just a dream. But in the long term? Economists are all sweating, fearing "stagflation"—economic stagnation plus soaring inflation. Think about the Fordney-McCumber Act of 1922, where high tariffs dragged global trade into the mire and ultimately triggered the Great Depression. Will history repeat itself this time? It's hard to say, but the market is already scared enough, and that 5% plunge in Nasdaq futures is not a joke.

II. Bitcoin: Taking a Beating in the Short Term, But Long-Term Growth?

Let's look at Bitcoin next. With this tariff policy taking effect, Bitcoin was caught off guard and dropped from around $100,000 to $8,200, with a drop of over 10%. Why? Because BTC is now deeply linked to risky assets; when the market panics, everyone first dumps risky assets to escape, and BTC naturally can't avoid it. Plus, tariffs might push up inflation, and the expectation of the Federal Reserve raising interest rates is on the rise again; high interest rates are not good news for BTC, which is a "zero-interest asset."

But don't worry, Bitcoin is quite resilient. It may fall in the short term, but I believe there's still potential in the long term. Why do I say that? First of all, the inflation and economic uncertainty caused by tariffs may lead more people to use BTC as a "digital gold" for hedging against risks. Over the past few years, every time there's been a global economic disturbance, Bitcoin has always found an opportunity to rebound, like during the 2020 "mask" period when BTC soared from just over $10,000 to over $60,000. Looking at the current situation, the Trump administration's attitude towards cryptocurrencies is quite friendly; he even mentioned establishing a "national Bitcoin reserve," which is like giving BTC a boost.

There's also the matter of mining costs increasing significantly due to tariffs. The main forces in BTC mining are in China and North America, and most of the mining machines and chips rely on imports. Once tariffs are added, the price of mining machines might increase by more than 20%, which means mining costs could jump by about 17%. Small miners will have a tough time, and large mining businesses may also have to grit their teeth and bear it. But this could actually push up BTC prices—when there's more pressure on the supply side, doesn't scarcity become more apparent? So, in the short term, BTC may still fluctuate for a while, but in the medium to long term, I am still somewhat optimistic; $100,000 might just be the starting point.

III. Altcoins: Destined to Follow the Downtrend, Not the Uptrend?

Let's talk about altcoins. The relationship between these younger brothers and their older brother BTC is really a case of "falling together but not rising together." Once tariffs are implemented and BTC drops, altcoins will be scrambling to find their place. Why? Because altcoins are "riskier" than BTC, with a stronger speculative nature; when there's the slightest movement in the market, funds will run here first.

But altcoins are not entirely without a chance. The impact of tariffs on them is actually similar to BTC, but with some differences. For instance, ETH's correlation with the Nasdaq is even higher than BTC's; this time the US stock futures market collapsed, and ETH naturally couldn't escape. However, ETH has its own fundamental support—DeFi, NFTs, smart contracts, and other ecosystems are still developing, and there's still potential in the long term. Then there are altcoins linked to the real economy, like VeChain (VET) related to supply chains; once the trade war starts and global trade gets messy, it might bring opportunities instead.

However, altcoins have a big problem: poor liquidity and many retail investors. The market panic caused by this round of tariffs will probably drive quite a few small coins directly to "zero." So, in the short term, altcoins will most likely still be "falling but not rising"; after surviving this cold winter, only the top few may make it. Friends who want to bottom-fish should be careful and not dive headfirst into a pit.

IV. Where Will the Future Go? Look at These Points

The impact of this reciprocal tariff landing has only just begun, and where it will go next depends on several things:

The intensity of counterattacks from other countries: If Canada, the EU, China all fight back hard, and the trade war escalates, the global economy and the crypto market will shake again.

The Federal Reserve's response: If inflation really rises, will the Federal Reserve raise interest rates? By how much? This is key to affecting BTC and altcoins.

Trump's cryptocurrency policy: If he really promotes a "Made in USA" crypto industry, such as supporting BTC mining and building a national reserve, market confidence could warm up quite a bit.

Market sentiment: Don't underestimate the power of retail investors; after this wave of panic, will everyone come back to grab BTC and altcoins?

V. Advice for Investors

Finally, let's talk about something practical. Faced with this tariff impact, what should ordinary investors do? I have several suggestions:

BTC: Don't rush to bottom-fish in the short term; wait for market sentiment to stabilize. If $8,200 can hold, consider building positions in batches.

Altcoins: Choose top projects, stay away from small coins, ETH, BNB and others with strong ecosystems are still worth looking at.

Cash is king: With such high uncertainty, keep some cash on hand; it's not too late to make a move when opportunities arise.

In general, this matter of reciprocal tariffs by the US is a double-edged sword in the short term; both the global economy and the crypto market will take a hit. But in the long term, BTC may take the opportunity to make a comeback, and there could be dark horses among altcoins. We, as onlookers, should keep an eye on the situation and make our moves at the right time! If you have any thoughts, feel free to leave a message for discussion!

Is Trade War 2.0 upon us? Let's analyze the impact on the global economy, Bitcoin, and altcoins together.

Hey, crypto enthusiasts, today we're discussing a significant issue—the US's reciprocal tariff policy has officially taken effect! This matter has been brewing since Trump took office. On the morning of April 3rd, the market went haywire, with Nasdaq futures plunging 5%, and Bitcoin briefly dropping to $8,200. This is not a minor event; it feels like an economic H-bomb affecting the global economy. Next, I will take you through how this move will affect the global economy and the crypto sphere.

I. The Impact on the Global Economy: Is Trade War 2.0 Here?

Let's start with the global economy. The reciprocal tariff policy this time is, in simple terms, "tit for tat." The US will impose a 10% base tariff on all regions worldwide starting from April 5th, and from April 9th, impose higher special tariffs on 60 specific regions. This move sounds familiar, right? Yes, it's the same flavor as Trump's trade war back then, only this time it's harsher and more comprehensive. The goal is clear: reduce trade deficits, bring manufacturing back to the US, and incidentally save more money for the treasury.

But it's not that simple! The global supply chain is already as tangled as a spider web; if you tug at one part, another part will get messed up. For instance, major trade partners of the US like China, Mexico, and Canada will probably be in a lot of trouble. Once tariffs are added, export costs will soar, American consumers will have to pay more for goods, and inflationary pressure will rise immediately. Not to mention that other countries might not be willing to show weakness; Canada has already threatened retaliatory tariffs, and the EU is also sharpening its knives, ready to fight back. If this turns into a full-scale trade war, global economic growth will take a hit.

In the short term, the US economy might get some small benefits since tariffs can bring in more money, with an estimated increase of $400 billion, and the return of manufacturing is not just a dream. But in the long term? Economists are all sweating, fearing "stagflation"—economic stagnation plus soaring inflation. Think about the Fordney-McCumber Act of 1922, where high tariffs dragged global trade into the mire and ultimately triggered the Great Depression. Will history repeat itself this time? It's hard to say, but the market is already scared enough, and that 5% plunge in Nasdaq futures is not a joke.

II. Bitcoin: Taking a Beating in the Short Term, But Long-Term Growth?

Let's look at Bitcoin next. With this tariff policy taking effect, Bitcoin was caught off guard and dropped from around $100,000 to $8,200, with a drop of over 10%. Why? Because BTC is now deeply linked to risky assets; when the market panics, everyone first dumps risky assets to escape, and BTC naturally can't avoid it. Plus, tariffs might push up inflation, and the expectation of the Federal Reserve raising interest rates is on the rise again; high interest rates are not good news for BTC, which is a "zero-interest asset."

But don't worry, Bitcoin is quite resilient. It may fall in the short term, but I believe there's still potential in the long term. Why do I say that? First of all, the inflation and economic uncertainty caused by tariffs may lead more people to use BTC as a "digital gold" for hedging against risks. Over the past few years, every time there's been a global economic disturbance, Bitcoin has always found an opportunity to rebound, like during the 2020 "mask" period when BTC soared from just over $10,000 to over $60,000. Looking at the current situation, the Trump administration's attitude towards cryptocurrencies is quite friendly; he even mentioned establishing a "national Bitcoin reserve," which is like giving BTC a boost.

There's also the matter of mining costs increasing significantly due to tariffs. The main forces in BTC mining are in China and North America, and most of the mining machines and chips rely on imports. Once tariffs are added, the price of mining machines might increase by more than 20%, which means mining costs could jump by about 17%. Small miners will have a tough time, and large mining businesses may also have to grit their teeth and bear it. But this could actually push up BTC prices—when there's more pressure on the supply side, doesn't scarcity become more apparent? So, in the short term, BTC may still fluctuate for a while, but in the medium to long term, I am still somewhat optimistic; $100,000 might just be the starting point.

III. Altcoins: Destined to Follow the Downtrend, Not the Uptrend?

Let's talk about altcoins. The relationship between these younger brothers and their older brother BTC is really a case of "falling together but not rising together." Once tariffs are implemented and BTC drops, altcoins will be scrambling to find their place. Why? Because altcoins are "riskier" than BTC, with a stronger speculative nature; when there's the slightest movement in the market, funds will run here first.

But altcoins are not entirely without a chance. The impact of tariffs on them is actually similar to BTC, but with some differences. For instance, ETH's correlation with the Nasdaq is even higher than BTC's; this time the US stock futures market collapsed, and ETH naturally couldn't escape. However, ETH has its own fundamental support—DeFi, NFTs, smart contracts, and other ecosystems are still developing, and there's still potential in the long term. Then there are altcoins linked to the real economy, like VeChain (VET) related to supply chains; once the trade war starts and global trade gets messy, it might bring opportunities instead.

However, altcoins have a big problem: poor liquidity and many retail investors. The market panic caused by this round of tariffs will probably drive quite a few small coins directly to "zero." So, in the short term, altcoins will most likely still be "falling but not rising"; after surviving this cold winter, only the top few may make it. Friends who want to bottom-fish should be careful and not dive headfirst into a pit.

IV. Where Will the Future Go? Look at These Points

The impact of this reciprocal tariff landing has only just begun, and where it will go next depends on several things:

The intensity of counterattacks from other countries: If Canada, the EU, China all fight back hard, and the trade war escalates, the global economy and the crypto market will shake again.

The Federal Reserve's response: If inflation really rises, will the Federal Reserve raise interest rates? By how much? This is key to affecting BTC and altcoins.

Trump's cryptocurrency policy: If he really promotes a "Made in USA" crypto industry, such as supporting BTC mining and building a national reserve, market confidence could warm up quite a bit.

Market sentiment: Don't underestimate the power of retail investors; after this wave of panic, will everyone come back to grab BTC and altcoins?

V. Advice for Investors

Finally, let's talk about something practical. Faced with this tariff impact, what should ordinary investors do? I have several suggestions:

BTC: Don't rush to bottom-fish in the short term; wait for market sentiment to stabilize. If $8,200 can hold, consider building positions in batches.

Altcoins: Choose top projects, stay away from small coins, ETH, BNB and others with strong ecosystems are still worth looking at.

Cash is king: With such high uncertainty, keep some cash on hand; it's not too late to make a move when opportunities arise.

In general, this matter of reciprocal tariffs by the US is a double-edged sword in the short term; both the global economy and the crypto market will take a hit. But in the long term, BTC may take the opportunity to make a comeback, and there could be dark horses among altcoins. We, as onlookers, should keep an eye on the situation and make our moves at the right time! If you have any thoughts, feel free to leave a message for discussion!