China tariff triggers global market jitters, impacting Wall Street and causing a Bitcoin dip.
Despite tariff fears causing recent sell-offs, the actual implementation may reduce uncertainty and lower bond yields, potentially aiding risk assets.
Positive developments like USDC's IPO, XRP futures, and Ethereum's upgrade offer optimistic counterpoints.
Global markets are on edge as China slams the U.S. with a 34% tariff, sending shockwaves through Wall Street and crypto. Bitcoin, which had recently shown signs of recovery, climbing above $84K, took a hit as Nasdaq futures plunged further.
Bitcoin fell from $84,600 to $83,000. While thatโs a noticeable drop, it wasnโt as steep as many feared. Experts say the market is reacting less dramatically because the uncertainty is now gone. Often, not knowing whatโs coming creates more panic than the event itself.
Investors Pull Billions from U.S. Stocks
Since Donald Trump returned to office on January 20, concerns over tariffs and a possible global trade war have unsettled markets. These worries led to a major drop in investor confidence. As a result, Bitcoin fell from a record high of over $109,000 to below $80,000 last month.
In the week ending April 2, U.S. investors pulled $10.85 billion out of equity funds. Many feared that Trumpโs trade policies could raise business costs, hurt profits, and even trigger a recession. Thatโs a big change from the $22.89 billion they had invested just the week before.
โTariffageddonโ Hits 180 Countries
This week, Trump imposed major tariffs on 180 countries, with China, the EU, and Southeast Asia hit hardest. U.S. tariffs have now crossed the 20% level, matching the historical threshold set by the Smoot-Hawley Act of the 1930s.
Oddly enough, this dramatic โtariffageddonโ moment might bring some relief. With uncertainty out of the way, investors may begin to feel more confident. After the tariffs were announced, bond yields dropped around the world, hinting that inflation could slow down. This goes against the common fear that tariffs would cause stagflationโslow growth and high pricesโwhich might have forced the Fed to keep interest rates high.
Bond Yields Fall – Rate Cuts in Sight?
U.S. 10-year bond yields dropped below 4% for the first time since October. Yields in the U.K., Germany, and Japan also fell sharply. This gives hope that the Fed could soon lower interest ratesโa move that usually supports riskier assets like crypto.
All Eyes on Fridayโs Jobs Report
Investors are watching Fridayโs U.S. jobs report closely. If the numbers are strong, confidence may grow. If theyโre weak, the Fed may be more likely to cut rates. Either outcome could be positive for markets. And since the report wonโt yet reflect Trumpโs tariffs, it offers a clearer view of the economy before the policy change.
Bitcoin’s Drop Isnโt About Bitcoin
Crypto experts say the recent fall in Bitcoinโs price isnโt because of any weakness in the asset itself. Instead, it’s being pulled down by global market trends. As the broader economic situation improves, Bitcoin could bounce back faster than traditional investments.
The Brighter Side
Even with market pressure, the crypto industry continues to move forward. Circleโs USDC stablecoin is on track for an IPO. Coinbase Derivatives has filed with the CFTC to self-certify XRP futures. Ethereum is preparing for its Pectra upgrade, launching on May 7, which is expected to be a major step forward.
The SEC has officially acknowledged Fidelityโs application for a spot ETF tied to Solana (SOL), bringing it one step closer to being approved. Despite recent market stress, crypto continues to evolve and grow at a fast pace.
Stay tunedโbig moves are ahead in crypto.
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