Trump continues to lash out, U.S. stocks and cryptocurrencies plummet, do you still have hope now?

Source: Talking about Li and Talking about the Outside

In recent days, it seems that everyone's focus has been on the issue of tariffs.

On April 3rd (Beijing time), U.S. President Trump announced a new tariff policy affecting multiple countries globally, including a minimum benchmark tariff of 10% on trade partners, with higher tariffs imposed on certain partners, resulting in a total tariff on China as high as 54%.

On April 4th, China also began to retaliate against the U.S. tariff policy, announcing a 34% tariff on all imported goods originating from the U.S. (note the wording here: originating from the U.S.).

Regarding the issue of tariffs, there are many opinions online, but one point is generally agreed upon: the tariff war has thrown the market into chaos, triggering panic in the financial markets and new uncertainties.

Why is Trump doing this?

A popular viewpoint suggests that Trump hopes to lower the government's debt financing costs, and to achieve this, he needs to create some situations to facilitate a decrease in interest rates.

So, is this a good or bad thing?

This question can be viewed from both short-term and long-term perspectives. In the short term, it is definitely not a good thing, as U.S. stocks are plummeting, and crypto assets are also crashing, with the negative issues potentially leading to a larger-scale crisis in the financial markets. However, if it can lead to a significant decrease in interest rates, then from a longer-term perspective (considering only financial aspects and not political factors), the large-scale new liquidity brought by low interest rates could potentially spark a new upward trend.

Of course, many conspiracy theorists online have elevated the issue of tariffs to a higher level of national politics, with some even suggesting it could lead to a third world war, presenting what seems to be a well-reasoned analysis. It is difficult to evaluate this; different people will always have different viewpoints, and it depends on how you see it or what you believe.

In any case, we won't delve into such profound issues; we simply view the tariff situation as an economic strategy by Trump, meaning he may hope to artificially create some crises to trigger short-term panic in the global market, and then at the right moment, present a prepared response plan to rescue the market, ultimately making Trump and America great again.

Trump is a successful businessman and a successful politician; he cannot be truly reckless and keep U.S. stocks on the brink of collapse for a long time. U.S. debt is the lifeblood of America; addressing the basic issues of U.S. debt first and then revitalizing the stock market seems to be a priority choice. This also represents a choice between short pain and long pain. If a potential economic crisis (or recession) can force the Federal Reserve to intervene and create a low-interest-rate environment through rapid rate cuts, then this might be what Trump desires.

In summary, there is always an important intrinsic causal relationship among U.S. stocks, U.S. debt, the U.S. dollar, and commodities. If you were Trump, facing some of the current issues in America, what choices would you make?

Let's return to the topic of the crypto market.

In recent days, many people have been leaving messages asking me whether it is a bull market or a bear market and what they should do.

If you are still struggling with the question of bull market or bear market, then you should first think about what your definition of a bull market or bear market is. We have also discussed this in previous articles on Talking about Li and Talking about the Outside:

Everyone's judgment criteria are different. If you believe that a drop of more than 70% in your investment portfolio constitutes a bear market, then for you, it is a bear market. If you believe that Bitcoin falling below the MA200 is a bear market, then for you, it is a bear market. If you believe that a death cross between EMA21 and EMA55 on the weekly chart indicates a bear market, then for you, it is not yet a bear market. If you think that if more than half of the KOLs or bloggers you follow declare a bear market, then for you, it is a bear market. And so on…

In fact, the definitions of bear or bull markets by others are not important to you; seeking validation for such questions is not very meaningful. The key is how you view the issue of bull or bear markets.

I remember in the previous article (April 1), we revisited the "Bitcoin Indicator Template," and if you are considering based on those long-term indicators, we believe that we have not yet entered a true bear market, or it can also be described as a temporary bear market (or a major-level correction). If we extend the time frame, it is highly probable that Bitcoin will continue to reach new highs in the future; it just depends on whether you can wait until that time. Maintaining patience is not easy, but I believe it is what is most needed right now.

Short-term trends are unpredictable, but long-term trends remain clear!

In the short term, some say Bitcoin may drop to $50,000 this year, while others say it may rebound and rise to $120,000 or even higher. Both directions are probabilistic. As we mentioned before, if you are a professional trader, or technically inclined, or can perceive the short-term market, then you can certainly engage in short-term trading at different levels (hourly, daily, etc.), and even trade contracts, allowing you to make money regardless of market fluctuations.

But if you are an ordinary investor like me, then the DCA strategy we have discussed multiple times remains one of the most suitable strategies. We just need to buy Bitcoin, hold Bitcoin, and wait for selling opportunities. If we do these three things well, over time, you will see your investment portfolio grow positively, and any short-term fluctuations in this process can actually be ignored. Just continue with your daily life as usual.

For example, our last DCA buying execution period was from May 2022 to January 2024, and the start of our phased selling execution was in December 2024; all of this has been shared in historical articles. Our tentative plan for the next DCA execution is set to start in 2026, but the specific execution details have not yet been determined; we will consider this later (perhaps there will be new adjustments by then, and we will discuss it after this year's market has settled down).

However, based on my long-term observations, it seems that the proportion of people who can do the above (buy Bitcoin, hold Bitcoin, wait for selling opportunities) is relatively low. But thinking about it, this seems to be a normal phenomenon. If everyone could do this, then the market rules or gameplay would likely change again, because only a small number of people making money in the market is what makes it reasonable. If the vast majority of people could easily make money in a market, then there would no longer be any so-called big opportunities.

Therefore, for most people in the crypto space, if they see their investment portfolio continuously shrinking, they are likely to transition from initial excitement to panic, panic to doubt, doubt to pessimism, pessimism to despair, and despair to exit… and ultimately, very few can persist.

When the market rises, almost everyone feels like a genius, while the constant fluctuations and corrections in the market are the best way to filter out these people (and also a way for assets to transfer quickly). In retrospect, we can find that the crypto market is quite interesting; even after experiencing devastating blows (such as major corrections or near collapses), it seems to return with even stronger momentum, continuing to create new FOMO among more people.

People are always good at forgetting, and the market takes full advantage of this. We all love to talk about cycles, but how many can truly understand cycles?

Regarding the recent market situation, we have actually experienced similar scenarios many times, and we have seen even scarier corrections than now. At the same time, an interesting point is that the market seems to understand this as well, so those who still firmly believe that the metaverse, blockchain games, NFTs, etc., will continue to rise 100 times in this cycle seem to have suffered significant losses so far. As the saying goes, history tends to repeat itself, but it does not repeat simply; this requires a deeper understanding.

Many people say that learning from past failures or experiences can help them better adapt to the present or future, but the reality is that the market always finds a way to make you forget the past or continue to lose yourself. This is also why I have always held a certain reverence for the market, because I understand that over time, while I can learn a lot of new knowledge and accumulate more experience, if I try to directly conquer the market, the one who ultimately loses will be myself.

Now, many people are quite emotional, believing that the bull market has ended, and some are even shouting that BTC will go to zero… This is not the market's fault, but rather that people cannot control their emotions. At least I have never seen someone with 100 Bitcoins in their wallet shouting online that BTC will go to zero.

In the current market, it seems that many people have been forced to leave due to previous excessive FOMO. Currently, the so-called largest exchange in the universe, which claims to have surpassed 250 million registered users, has only a few hundred thousand participants in its popular TGE activities (the latest TGE saw a total deposit of 369,445 BNB; assuming each person deposits a maximum of 3 BNB, that would be around a few hundred thousand people).

Meanwhile, the so-called king of altcoins, ETH, is also showing increasingly weak performance, not only failing to break its previous high in this bull market but also continuously dropping to around $1,800, with a probability of continuing to fall to around $1,500. Additionally, the so-called comprehensive altcoin season based on historical success has yet to occur, and the probability of it happening in the future is decreasing (we have discussed this issue in previous articles on the topic of altcoin seasons).

The market ruthlessly ravages people's wallets time and again. But since we choose to engage in a high-risk field of extremely high-risk investments, we should have a basic awareness before deciding to participate: only invest funds that you can afford to lose, even if your position is in Bitcoin.

What does it mean to do the right thing?

In simple terms, when you decide to stay in this market, what you need to do is maximize your existing gains (avoid excessive greed); and when you decide to exit the market, what you need to do is minimize your missed gains (minimize your regrets).