Matrixport Research: A Brief Analysis of the Impact of "Reciprocal" Tariffs on BTC

On April 3, U.S. President Trump announced a new round of tariffs on America's trading partners. Although U.S. stock futures reacted significantly and have since retreated, the market response (especially implied volatility) remains relatively mild. Signs indicate that the market does not view this as a comprehensive risk-off event, leaving room for negotiation. As U.S. Treasury Secretary Scott Bessent suggested, this could be the beginning of a trade negotiation process lasting several months, potentially extending into June.

1

BTC remains below the key resistance area around $90,000. Under the premise of a neutral stance from the Federal Reserve, although the hedge fund arbitrage sell-off may be nearing its end (evidenced by the contraction of basis and financing rates, as well as significant liquidations of BTC futures on the Chicago Mercantile Exchange during the monthly roll period), the current market's buying drive remains relatively weak, and there are no clear signs of a reversal in the net outflow trend of BTC spot ETFs.

2

The Wall Street fear index VIX has risen slightly, from 20% to 23.5%, but still remains well below the peak of 36% during the panic of the recession in August 2024. At that time, the Federal Reserve made a rare emergency rate cut of 50 basis points in September, triggering a market rebound in the fourth quarter, while Elon Musk's public support for Trump and Trump's eventual election further fueled this rally. However, it was the Federal Reserve's policy shift that truly laid the foundation for the market rebound.

3

The upcoming U.S. earnings season is significant—especially following a wave of restocking activities before the tariff announcement. However, recent data, such as the ISM Manufacturing PMI falling into contraction territory, indicates that this restocking cycle has ended.

The forward-looking new orders index also shows signs of future weakness. Notably, the last time the Federal Reserve cut rates in September 2024 was not due to weak economic growth, but rather concerns about a potential slowdown in the labor market—an outcome that has yet to materialize.

4

In the cryptocurrency market, the 1-week BTC skew briefly surged to 20%, reflecting increased demand for downside protection around the $80,000 mark. The options skew refers to the difference in implied volatility between out-of-the-money put options and call options, typically reflecting market expectations of downside versus upside risk.

A positive skew indicates that put option prices are higher than call option prices, suggesting that investors are more inclined to hedge against the risk of price declines. However, as tariff concerns gradually fade from the news cycle, this skew has retreated to 9%. As a result, many put options may expire worthless—potentially triggering a wave of moderate buying pressure as traders enter the market after unwinding their hedges.

Trump may pivot to a more market-friendly policy narrative, such as tax cuts or deregulation, to stabilize market sentiment, as his manufacturing repatriation plan relies on strong growth in domestic and international investment.

Disclaimer: The market carries risks, and investment should be approached with caution. This article does not constitute investment advice. Trading in digital assets can involve significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions made based on the information provided herein.