The cryptocurrency market continues to plummet, and protests against Trump sweep across the United States
Source: Talking Outside the Box
Today (April 7), we are once again facing a Black Monday, with almost all global markets declining, not just the crypto market. The panic among people seems to have further fermented, and a bearish sentiment is prevalent in the market.
Many people say: The market is going to be completely ruined.
Trump said: I did it on purpose.
Powell said: Let's think about interest rate cuts again.
In this highly uncertain market condition, risk aversion for large funds becomes the primary task at hand. I just took a look at the yield on the 10-year U.S. Treasury bond, which has dropped to 3.88, as shown in the image below.
This week is destined to be a week of potential volatility, and there are many news items to pay attention to, such as (only listing those related to the U.S.):
April 9: The official effective date for reciprocal tariffs (Will trade negotiations ease?), the House of Representatives will hold a hearing (aiming to promote cryptocurrency asset regulatory legislation)
April 10: Unadjusted CPI annual rate announcement (market expectation is 2.6%), new minutes from the Federal Reserve's monetary policy meeting
April 11: PPI annual and monthly rates, initial value of one-year inflation expectations
As I always say, if you don't know what to do, then in the current extreme volatility, the best action is to do nothing.
If you still have spare positions for long-term investment, and these funds will not affect your real life, then the upcoming decline is still an opportunity for you to gradually increase your Bitcoin holdings (reserve). In other words, as an ordinary investor, the core position should be used to continue accumulating more Bitcoin at lower prices, which remains a relatively safe and simple operational strategy.
Of course, this premise is that you still have confidence in the future opportunities of the crypto market. The above is just our perspective, that is, if I were currently in a cash position, what I would choose to do, merely a thought-sharing, not investment advice.
Just this morning, a friend messaged me saying: He has been in the circle for over a year, consistently learning various cryptocurrency knowledge and trading many coins on-chain, and now he finally understands what he should do next. However, upon reflection, he found that not only have his profits disappeared, but his principal is also almost gone. Now he wants to sell but feels reluctant, and wants to buy but has no money, feeling quite frustrated.
This might also be the state of many newcomers currently.
As a friend in the group described today: Just before today, Bitcoin was at $66,000, almost reaching $70,000, and you were happy and hopeful. Today, Bitcoin is at $76,000, almost reaching $70,000, but you feel despair and fear. Bitcoin is still the same Bitcoin, and you are still you, but the difference is that you can no longer feel happy.
Most people, when they first enter this field, if someone tells them to just stick to accumulating Bitcoin, they definitely won't do it, because it seems boring and offers no high-return opportunities. Only after experiencing one or two rounds of baptism will they take the accumulation of coins seriously. I am the same; I bought Bitcoin for the first time in 2017, but it wasn't until 2019 that I started to customize my investment strategy, and there were overall losses during that transitional period.
Returning to the current market environment, after experiencing the peak in 2024, Bitcoin has dropped from around $109,000, and altcoins have plummeted even more severely. Many people are once again on a roller coaster, watching their profits slowly diminish or even go to zero, and many are once again reflecting deeply, deciding that if there is another opportunity, they will definitely do things differently. But as we mentioned in our previous article: Whenever another major market event occurs, the market will always find a way to make you forget the past or continue to lose yourself.
As the saying goes, "The world is like a chess game, with each situation being new," but there is also a saying, "There is nothing new under the sun." Perhaps when both the spear and the shield exist simultaneously, there is no contradiction at all.
Maybe in a few years, when we look back, the market in 2025 will be very interesting, and the current market will likely be recorded in history. The next action from the Federal Reserve may continue to put a period on the current crisis.
Since the recent market has been quite dull, I haven't paid much attention to the fluctuations of my Bitcoin holdings. So aside from my daily outdoor activities and writing articles at home, I occasionally scroll through Douyin or video platforms for entertainment, and I discovered some interesting things.
For example: Many domestic media or self-media have been posting videos of American citizens protesting against Trump/Musk these days. These videos look quite "spectacular," with crowds of people, and the comments below are mostly criticizing Trump, calling him a big fool.
Another example: A few days ago, Trump's "reciprocal tariff" list included an uninhabited island (with only penguins), which many media and self-media mocked, saying Trump is taxing Penguin Island, which is simply insane. Moreover, the data in the tariff table presented by Trump was directly pulled from Excel by an intern, and many comments on this matter stated that Trump's team is indeed a makeshift group.
This is also why I usually don't like to watch such news and comments, because many of the pushed contents are too subjective and purposeful, and the comment sections are extremely restless, lacking basic verification or thought, with many comments being off-the-cuff. I don't understand why Douyin doesn't push me more videos of beautiful long legs but insists on showing me those seemingly "positive energy" anti-American videos.
Of course, I am not trying to defend Trump in any way. To be honest, from my standpoint, I also dislike Trump. The way I "liked" him before he took office is now matched by how much I "dislike" him. But as we mentioned in our previous articles, objectively speaking, Trump is a successful businessman and a successful politician. He is surrounded by successful businessmen like Musk and a bunch of smart people. If you think Trump is a fool and his team is a makeshift group, then why don't you, as a genius, go become a president or the world's richest person?
When looking at any issue, we should try to be objective and conduct more analysis, even considering necessary thoughts through "role reversal." This will help us make rational judgments. This is also a good exercise for our investment thinking. Judgments can be right or wrong, but we should try to avoid making completely subjective judgments right off the bat.
Let's continue discussing the examples above. Why are American citizens protesting (some reports say 20,000 people participated in the protests, while others say the number of protesters could exceed 3 million; I can't be bothered to check the exact numbers, as I'm not too interested in them)?
Some domestic media reports say the protests are to resist Trump's tariff policies. Mainstream media also say that Trump is shooting himself in the foot, and in the face of American bullying, China has taken the lead in showing strategic resolve and wisdom. Trump will have no good outcome by opposing the people of the world.
However, after looking at some foreign media and asking ChatGPT, it seems that the reasons for the protests are mainly focused on issues regarding democratic systems, such as limiting abortion rights, immigration policies, and restrictions on transgender individuals. In other words, while the tariff issue is one of the reasons for the protests (after all, it is a fact that eggs in American supermarkets have become more expensive), Americans seem to be more concerned about issues related to democratic systems at the moment.
So, why does Trump have to be an unpopular president after officially taking office?
This question has actually been mentioned in our previous articles. The root of the core issue seems to be the U.S. debt problem. In simple terms, the U.S. government is indeed out of money, and since Trump is in charge, he needs to solve the problems of daily necessities.
Currently, the more direct ways to address this issue include:
Letting the Federal Reserve cut interest rates (lowering rates to ease debt pressure)
Reducing some related government expenditures
Raising more taxes to subsidize expenditure pressure
Other methods (such as a $5 million immigration golden card)
The first method seems to be "disregarded" by Powell at the moment. The second method is something Trump has been pushing for, like what Musk did after taking office, but it seems there is also significant resistance. The remaining third option, continuing to address the tax issue, seems to be a choice, although this approach carries considerable risks and could lead to potential economic problems or other issues (such as a stock market crash or global tensions). However, apart from that, there doesn't seem to be a better or faster way to generate revenue. We can't really send all U.S. aircraft carriers and planes out to forcibly seize resources, can we?
I just quickly checked some data; the total tax revenue for the U.S. federal government in the fiscal year 2024 is about $4.9 trillion, with the main sources including the following components:
Individual income tax: approximately $2.4 trillion
Social insurance and retirement taxes: approximately $1.7 trillion
Corporate income tax: approximately $530 billion
Other income: approximately $253 billion
However, the budget deficit for the U.S. government in the fiscal year 2024 has already reached $1.8 trillion, with total expenditures of about $6.75 trillion. According to the latest data from the CBO (Congressional Budget Office), the budget deficit for the U.S. government in the fiscal year 2025 is expected to reach $1.865 trillion. Meanwhile, nearly $3 trillion in U.S. debt will mature in 2025.
One important issue that can be directly observed is that the U.S. has the most profitable companies in the world (like Apple and other large enterprises), but these large companies "almost" do not pay taxes.
For example, if the cost of producing one iPhone in China is $300, to avoid taxes, Apple will first sell the iPhone produced in China to its subsidiary in Ireland for $700, then export it to a company in the Netherlands (a tax haven) that may also be registered in Ireland, and then export it from the Netherlands to the U.S. at a market price of $750. In this way, although Apple only has a profit of $50 in the U.S., the $400 profit has already been perfectly transferred without having to pay taxes in the U.S.
Of course, the above is just a simple example; the actual operational process is much more complex than what I described.
At this point, we should not find it difficult to understand the difficulties Trump faces. The government has huge expenditures, but it cannot collect a single cent in taxes from those wealthy corporations because these large companies always have a thousand ways to perfectly avoid the U.S. tax system (many well-known large companies are registered in some small islands). If Trump directly confronts these wealthy corporations for money, he probably wouldn't even know how he would end up, so Trump prefers to achieve his goals by targeting other countries (at least he won't be assassinated). For example, implementing a comprehensive so-called "reciprocal tariff" policy seems to be a way to ensure that no matter where those companies are registered, even if it's an island with only penguins, they still have to pay at least 10% in taxes.
If the above holds true, then the wealthy corporations should also understand Trump's "calculations," but everyone just doesn't want to tear their faces in their own backyard.
However, all of the above are just our speculations. As for what Trump (and his think tank) is thinking and what new things he will come up with next, no one can know. Whether it's Bitcoin, gold, or U.S. stocks, the current market seems to be completely influenced by Trump's policies. It seems everyone is waiting for the next move from the Federal Reserve, and we will leave that to time to verify.
In reality, this is how society works: the rich fight for their own interests or positions, and in the end, it is often the poor (ordinary people) who get hurt.
In short, we may face even greater storms and rains ahead, but after the storms and rains, there will still be opportunities to see new rainbows. The key is whether you can "survive" relatively intact until that time. The market has reached its most difficult moment, but the big opportunities in the market often emerge from declines. You must strictly manage your positions, adhere to your trading discipline, continue to be patient, and not become overly excited due to surges or overly panicked due to drops. Always face short-term market fluctuations with your "most comfortable" position.
