In the early hours of today, the White House press secretary announced that the additional 104% tariffs on China had taken effect at noon Eastern Time, causing another plunge in global financial markets.

The market's hopes for a rebound were dashed. In the early hours of today, the White House press secretary announced that the additional 104% tariffs on China had taken effect at noon Eastern Time, causing another plunge in global financial markets.

On April 3rd, when Trump's tariff policy was introduced, US Treasury Secretary Bessen had suggested that all countries refrain from retaliatory actions and wait for any negotiations before April 9th. There was even a replay of the "fake news" drama, with hopes that Trump might be willing to negotiate the trade barriers he had imposed on multiple countries and specific products, leading to a short-lived "resurrection" in global capital markets.

However, after several days of博弈, the market did not receive any good news. From the initial 10% at the beginning of the year to 20% in March, and then to 34% in early April, now compounded by a 50% "retaliatory increase," the Sino-US trade friction has escalated into an "economic nuclear war."

Can the Stock Market Hold Up Amidst the Sino-US Trade War?

Since the Trump administration announced a new round of tariff policies last week, international capital markets have experienced severe turbulence, with US stocks being hit the hardest. As of Tuesday's close, the S&P 500 index broke below 5,000 points for the first time in nearly a year, down 18.9% from its peak on February 19th, just a step away from the 20% decline threshold of a "technical bear market." It is estimated that the market value of S&P 500 index components evaporated by $5.8 trillion in just four trading days, setting the record for the worst four-day consecutive decline since the index was established in the 1950s.

Trade War Escalates: Can Bitcoin Hold the $70,000 Mark?

At the same time, the US tariff policy has triggered a chain reaction in global capital markets. Bloomberg statistics show that since Trump proposed the so-called "reciprocal tariffs" on April 3rd, the total market value of global stocks has shrunk by $10 trillion, slightly more than half of the EU's GDP. US tech giants have become the hardest-hit areas, with the combined market value of seven major tech companies, including Apple and Microsoft, evaporating by $1.65 trillion. Among them, Apple's stock price plummeted nearly 23% in four days due to its heavy reliance on overseas supply chains, marking its largest weekly decline since the outbreak of the pandemic in 2020.

Previously, many opinion leaders in the crypto community firmly believed that the crypto asset class would not be affected by traditional tariffs because their transactions do not go through national borders and customs. They argued that in the face of a new round of mercantilism and trade barriers worldwide, the value proposition of cryptocurrencies would become even more prominent. Strategy founder Michael Saylor posted on April 3rd that "Bitcoin has no tariffs."

However, the total market value of cryptocurrencies has fallen by 35% from its peak in December 2024, dropping from $3.9 trillion to $2.5 trillion. The "Crypto Fear and Greed Index" shows a reading of 17, in the extreme fear zone, indicating a pessimistic market sentiment.

Last night, Bitcoin once again broke below $75,000, while BTC's market share continued to rise, the altcoin market was in a sorry state, and Ethereum once again broke below $1,400.

Trade War Escalates: Can Bitcoin Hold the $70,000 Mark?

In the past 12 hours, the crypto market has seen a total of $243 million in liquidations, with $192 million in long positions and $51.03 million in short positions.

Trade War Escalates: Can Bitcoin Hold the $70,000 Mark?

The continuous decline in Bitcoin prices may even force Strategy, which has been buying all along, to sell Bitcoin. According to the 8-K form submitted by Strategy to the SEC on April 7th, if Bitcoin prices continue to fall, Strategy may be forced to sell its Bitcoin holdings to repay debts, breaking Michael Saylor's promise of "never selling Bitcoin."

Since Trump won the election in November 2024, Strategy has bought 275,965 BTC at an average price of $93,228 ($25.73 billion), and this part has already suffered a floating loss of $4.6 billion.

Pessimistic Expectations Intensify: What Analysts Think of the Current Market

In the past week, several Wall Street banks, including Goldman Sachs and JPMorgan, have warned that if the trade war continues to escalate, the US and even the global economy may fall into recession this year, further weakening the attractiveness of financial markets.

However, the White House team is cheering victory, "We are bottoming out, really bottoming out," Trump's chief trade advisor Peter Navarro said on Fox News on Monday evening, "It will turn around next, and those companies in the S&P 500 that first move production back to the US will drive the recovery, which will happen soon. I guarantee the Dow will hit 50,000 points, and there will be no recession."

However, Navarro's optimistic remarks were not endorsed by JPMorgan CEO Jamie Dimon, who warned in his annual letter to shareholders on Monday that Trump's tariffs would push up prices, drag down the global economy, and weaken the US global position by undermining its alliance system. Even some of Trump's allies, including Elon Musk and Bill Ackman, have recently warned that this tariff policy logic is seriously flawed and is the wrong path.

Crypto analyst Phyrex believes that from the Federal Reserve's behavioral logic, unless inflation drops significantly, even a "defensive rate cut" will be hard to implement quickly. The real turning point may be when the US GDP data is released at the end of April.

From the crypto market perspective, BTC's turnover rate has declined today. URPD data shows that even though the price broke below $77,000, investors in the $93,000 to $98,000 range hardly reduced their positions. This indicates that the current selling pressure is not from high-position holders, and there has been no panic selling at the top. The on-chain structure is relatively healthy. As long as subsequent policies do not change frequently, BTC and risk markets may still have room for phased repair.

As US Treasury bonds no longer play the role of a safe haven, the yield on 10-year Treasury bonds has risen to around 4.3%, higher than the level at the end of March, pushing up the cost of mortgages and other types of loans. The 30-year Treasury bond yield closed at 4.76%, up nearly half a percentage point from Monday's low. The spread between the yields of the US two-year and ten-year Treasury bonds widened to 48 basis points, the steepest level since May 2022.

BitMEX co-founder Arthur Hayes posted that "The Fed doesn't have much time left. The situation is getting out of control. Previously, when the stock market fell, it would lead to a decline in the yield of US 10-year Treasury bonds, which was beneficial to risk assets. Now, the stock market is falling, and the yield of US 10-year Treasury bonds is rising. This is bad. The market has finally realized that if dollar export income decreases, there will be no more buyers for Treasury bonds or stocks. The game is over."

Trade War Escalates: Can Bitcoin Hold the $70,000 Mark?

Pessimistic expectations are intensifying. Trader Eugene posted that "The introduction of global trade tariffs marks a change in world order that has not been seen in over 50 years. Free trade has been a key factor in driving productivity and economic growth, leading to the largest long-term bull market in history. The shift from openness to protectionism will have far-reaching effects that will gradually emerge over years, unless Trump completely abandons his tariff plan. I think the likelihood of this is very low. This will pose a significant long-term resistance to global risk assets."

In the cryptocurrency space, the recent structural decline in active developers is perhaps the most worrying. In the last cycle, we could observe developer activity and take comfort in knowing that our industry was still benefiting from long-term tailwinds. Fast forward 2-3 years, and not only have we not produced anything particularly interesting or important, but the future outlook is even worse than before.

In the last cycle, we were looking forward to the launch of ETFs and a better regulatory environment under a crypto-friendly government as a glimmer of hope at the end of the tunnel. Now that these have been realized, they have once again failed to meet expectations. I don't see anything on the horizon that could free cryptocurrencies from their natural "Ouroboros" (self-cycling, self-consuming dilemma).

From a broader perspective, the world situation is in a great change unseen in a century. Billionaire hedge fund manager and Bridgewater Associates founder Ray Dalio posted that while the current market and economic focus on tariffs is important, it should not distract from deeper global issues. He pointed out that we are in a "classic collapse" phase of monetary, political, and geopolitical order, something that may happen once in a lifetime but has occurred multiple times in history.

Dalio suggested not to be distracted by short-term events like tariffs, but to focus on the interaction of five major forces (economic, political, geopolitical, natural, and technological). Studying similar historical cycles (such as currency crises) can help predict the future.

"The current changes are part of a historic grand cycle, and tariffs are just the surface. The real drivers are the structural collapses of monetary, political, and geopolitical orders. Understanding the interaction of these forces and learning from historical experience can better prepare us for the future."