US President Trump announced in the early hours of the morning that tariffs on China would be increased to 125%, and tariffs on other countries would be suspended for 90 days. Trump had emphasized a day earlier that he would not suspend tariffs, but he quickly "broke his promise", which shocked the market.
After the news was released, the Nasdaq index of U.S. stocks soared by more than 12%, the largest single-day increase since 2001, the Dow Jones index also soared by nearly 8%, the S&P rebounded strongly, and the VIX plummeted from 57 to 33. The crypto market also rebounded sharply, with Bitcoin breaking through $83,000 at one point and Ethereum approaching $1,700 at one point.
StarEx Exchange analysts believe that the short-term market negatives have dissipated, but there is still great uncertainty in the medium term. Some institutions have lowered the probability of a US recession, but the 25% auto import tax is still in effect, and the basic tariff of 10% still exists. Inflationary pressure still exists. The CPI and PCE data in May are difficult to reflect the full impact, and will only be gradually reflected starting in June. The Fed minutes show that there is no intention to cut interest rates in advance, and it still depends on future employment and economic data.
From the market's perspective, Bitcoin ETF is still in a state of outflow, and institutional and large investors are not willing to buy. The main turnover of the market rebound is short-term investors, while long-term chips are still on the sidelines. In other words, the current volatility of the crypto market is dominated by emotions rather than funds. StarEx exchange analysts believe that this is a short-term oversold rebound rather than a trend reversal.
US President Trump is currently acting like a child, imposing a 125% tariff on China on top of the 104% tariff that is in effect. This is completely meaningless and is purely a show of anger with China. The world's number one superpower's policies are jumping back and forth, forcing and bribing other minions to obey him, leaving the impression of a rogue.
One sentence can make the market plummet, and another sentence can make the market soar. The capital market is completely dominated by emotions and is always dependent on Trump's mood. Arthur Hayes believes that Trump's tariff policy confirms the effectiveness of the move indicator. Bitcoin has shown strong resilience against the backdrop of a stock market crash. The next time bad news strikes, Bitcoin may not follow the stock market crash.
StarEx Exchange analysts believe that the tariff "farce" has not met Trump's expectations in the short term. Although it is tough on China on the surface, the suspension of tariffs by other countries has not hit China's re-export trade, and the impact is limited. There is a feeling of "loud thunder and little rain", and Trump's tossing has greatly damaged the image and credit of the United States. In the medium and long term, the United States' high debt, high inflation, class division and other problems have not been effectively solved, and these problems still leave great uncertainty for the future capital market.
As Ray Dalio, founder of Bridgewater Associates, said in his latest article, the current market is overly focused on the appearance of tariffs and ignores deeper systemic changes. We are witnessing the simultaneous reconstruction of five major forces: the collapse of the monetary/economic order; the disintegration of the domestic political order in the United States; the reorganization of the international geopolitical order; the destructiveness of natural disasters (droughts, floods, and epidemics); and the significant impact of technological changes (such as artificial intelligence). At this moment, people are focusing a lot of attention on the tariffs that have been announced and their huge impact on the market and the economy, but almost no one is paying attention to the root causes of these tariffs and the greater damage that may follow. Most people ignore the fundamental background that led to his election as president and facilitated the introduction of these tariffs. They also mostly ignore the more important forces that drive everything, including the forces that drive the introduction of tariffs.
We are witnessing a classic collapse of a major monetary, political and geopolitical order, the kind that usually only happens once in a lifetime but has happened many times in history, whenever similar unsustainable conditions emerge.
The monetary order will change in dramatic and disruptive ways, and we are currently in the early stages of this process. This change will have a huge impact on capital markets, which will have a profound impact on the economy. We are at a turning point in the reconstruction of the monetary order in a century. Will this time be the time for cryptocurrency to take center stage?
