Trump casts his spell again, tariff policy welcomes a new turn, will the cattle return quickly?

Author: Asher, Odaily Planet Daily

The U.S. tariff policy has taken a new turn. This morning, Trump announced that considering the active negotiations on trade, currency, and tariffs with over 75 countries, he decided to implement a 90-day "suspension period" for tariffs on these countries, during which tariffs will be significantly reduced to 10%. However, a 125% tariff will be immediately imposed on China. Under such a shift in tariff policy, both the U.S. stock market and the cryptocurrency market surged.

• OKX real-time data shows that as of today at 8:00 AM (all subsequent references are based on this time), BTC peaked above $83,500, currently reported at $82,600, with a 24-hour increase of 8.23%;
• Besides BTC, ETH peaked above $1,680, currently reported at $1,670, with a 24-hour increase of 13.27%; SOL briefly broke through the $120 mark, currently reported at $119, with a 24-hour increase of 12.60%;
• Other mainstream altcoins also saw significant increases. Among the top 100 cryptocurrencies by market capitalization, HYPE broke through $14, with a 24-hour increase of 25.9%, currently reported at $14.01; S broke through $0.5, with a 24-hour increase of 24.9%, currently reported at $0.5002; PEPE broke through $0.000007, with a 24-hour increase of 17.5%, currently reported at $0.00000702;
• In the U.S. stock market, by the end of the day, all three major indices rose, with the Dow Jones up 7.87%, marking the largest single-day increase since March 24, 2020. The S&P 500 index rose 9.52%, the largest single-day increase since October 28, 2008. The Nasdaq rose 12.16%, the largest single-day increase since January 3, 2001, and the second-largest in history. The Russell 2000 index rose 8.66%, the largest single-day increase since March 24, 2020;
• Influenced by the overall market uptrend, the total market capitalization of cryptocurrencies also surged rapidly. According to CoinGecko data, the total market capitalization of cryptocurrencies has now surpassed $2.7 trillion, with a 24-hour increase of 6.2%;
• In terms of derivatives trading, Coinglass data shows that in the past 24 hours, the total liquidation across the network was $589 million, including $214 million in long liquidations and $375 million in short liquidations. In terms of cryptocurrencies, BTC saw liquidations of $235 million, and ETH saw liquidations of $167 million.

Tariff Suspension is Just a Brief Respite, Market Sentiment Remains Cautious

After Trump announced the latest tariff policy, many traditional financial analysts expressed their attitudes and related views. Currently, although the market has rebounded in the short term, most analysts and observers generally point out that this "suspended" tariff policy has not truly eliminated uncertainty, but may instead bring more chaos and is even seen as a political expediency rather than a rational economic decision. Here are some representative viewpoints:

U.S. Senate Minority Leader: The U.S. Government is Chaotic Like a Child's Play, Cabinet Struggles to Govern

U.S. Senate Minority Leader Schumer stated, "The government under Trump is chaotic; he changes daily, and his advisors argue with each other. We cannot accept such a chaotic cabinet to govern a country. Trump seems to be playing a game of red light, green light. Sometimes he puts the U.S. economy on red light, and sometimes he puts it on green light. I have never seen such chaotic government actions."

Chief Analyst at Oxford Economics New York: "Suspension" or "Reduction," Trump's Wording is Ambiguous

John Canavan, chief analyst at Oxford Economics New York, stated, "From President Trump's wording, we are not entirely clear whether it is a real suspension (of tariffs) or just a reduction of reciprocal tariffs to 10%. But in any case, it is clear that Trump has abandoned some of the worst tariff threats, which I think is obviously a net positive for risk assets. One thing it has not done is eliminate uncertainty, which arises because tariff levels seem to change daily."

Chief Market Strategist at Interactive Brokers: Doubts Whether U.S. Tariffs Will Resume in 90 Days, Uncertainty Reduced but Not Eliminated

Steve Sosnick, chief market strategist at Interactive Brokers, stated, "Trump's suspension of tariffs is definitely a surprise, considering the U.S. government has consistently stated they would not cancel tariffs and that tariffs are non-negotiable. This is a very understandable relief rebound. We now have to question whether tariffs will resume in 90 days. This will hinder businesses from planning for the near future and providing guidance for the current quarter. Uncertainty has decreased, but it has not completely disappeared."

FX Executive Director: Trump's 90-Day Tariff Suspension Will Only Bring More Uncertainty

Regarding Trump's announcement of a 90-day suspension of reciprocal tariffs, FX Executive Director Amarjit Sahota stated, "The market is experiencing huge volatility, especially in the stock market, reacting positively to this news. But the ensuing question is: why are we seeing this 'suspension' today? Is this really a good idea? Personally, I don't think it's a good idea: a 90-day suspension will only bring more uncertainty for those 90 days. This looks like a very poor policy decision, or at least poorly planned or executed."

Chief Market Strategist at Philadelphia National Investment Management Group: Nasdaq's 8% Rise in 20 Minutes is No Healthier than an 8% Drop

Mark Hackett, chief market strategist at Philadelphia National Investment Management Group, stated, "Trump's suspension of tariffs is definitely good news because it indicates that negotiations are in a sufficiently good state, and they believe they have completed what they needed to accomplish through initial dialogue. But I want to raise a very important warning, as the Nasdaq's 8% rise in 20 minutes is no healthier than an 8% drop, so I am being cautious right now."

What’s Next for the Cryptocurrency Market?

Arthur Hayes: The RMB Exchange Rate May Be Key, Uncertainty Remains on Whether China Will Retaliate

BitMEX co-founder Arthur Hayes stated, "This is not the policy response I expected, but it is still a response. The question remains: will China retaliate?" He also pointed out that investors should pay attention to how the People's Bank of China adjusts the RMB exchange rate this Thursday to gauge the next steps.

Ali Martinez: If BTC Holds Above $80,700, It May Reach $84,000 to $87,000

Cryptocurrency analyst Ali Martinez stated, "BTC is breaking out of the consolidation range. If the support level at $80,700 can hold, BTC is expected to rise, targeting $84,000, or even $87,000."

Santiment: Market Reacts Strongly to Tariff News, Still a Temporary Relief from Ongoing Issues

Analysts at blockchain analysis platform Santiment stated that although the latest "tariff suspension" policy is positive news that temporarily alleviates some market tension, it remains a temporary relief from ongoing issues. Just 48 hours ago, the market reacted with a "buy the rumor, sell the news" response due to misinformation about the tariff suspension, followed closely by the U.S. announcing a tariff increase of up to 104% on Chinese goods, which undoubtedly exacerbated market disappointment.

Analysts pointed out that the current fundamentals remain unclear and unreliable, with the market relying more on public greed and fear as contrarian indicators. In these unprecedented times, the market's overreaction to tariff news has become a signal worth closely monitoring.

Grayscale Research: Tariffs Cause Stagflation Shock, Potentially Positive for Bitcoin

Zach Pandl, head of Grayscale Research, stated, "Tariffs have brought about stagflation shock. Stagflation typically has adverse effects on the returns of traditional assets, but is beneficial for scarce commodities like gold (and possibly Bitcoin)."

Currently, although some positive news has emerged in the short term, alleviating some market sentiment, the ongoing uncertainty surrounding tariffs continues to exert pressure on the market.