[4/11/2025]"Trump’s Tariff Storm: Can Bitcoin and Stocks Weather the Chaos?"

Market Dynamics Amid Trump’s Tariff Policy: A Deep Dive into U.S. Equities and Bitcoin

The financial markets, as of April 10, 2025, are navigating a turbulent landscape following the Trump administration’s announcement of a formidable 145% tariff on Chinese imports. This policy, an amalgamation of an existing 20% tariff with an additional 125% reciprocal tariff, has heightened uncertainty and apprehension, casting a significant shadow over asset markets. U.S. equity markets have experienced a pronounced decline, with the Nasdaq plummeting by 4.31%, dragging down major stocks such as Tesla, NVIDIA, and Meta. Bitcoin has not been immune, undergoing a 28% correction—yet demonstrating resilience compared to the 53% drawdown during the 2021 Chinese mining ban. Currently trading at $79,695, Bitcoin has failed to fill the CME gap and breach the critical resistance level of $85,910, necessitating a recovery to the $80,000–$86,000 range to signal a potential trend reversal. While U.S. equities saw a late-session reduction in losses, the dollar index dropped to 100.85 points. Conversely, gold prices surged to a record high, nearing $3,200, potentially creating a conducive environment for Bitcoin’s ascent.

Economic Indicators: Consumer Price Index (CPI) and Market Response

The recently released Consumer Price Index (CPI) data revealed a figure of 2.4%, underperforming the anticipated 2.6%, signaling a slowdown in inflation and raising hopes for a market rally. However, despite this encouraging outcome, both U.S. equities and Bitcoin continued their downward trajectory, primarily due to the overshadowing uncertainty surrounding tariffs, which the CPI data failed to reflect. Market analysts noted that the CPI’s lack of tariff-related impact rendered its positive signal largely ineffective. Meanwhile, the 30-year U.S. Treasury auction yielded a robust 4.813%, reflecting strong demand. Upcoming indicators, such as the University of Michigan’s expected inflation and consumer sentiment indices, are poised to provide further insights into market psychology.

Global Reactions to Tariff Policies

The 145% tariff on China has amplified market uncertainty, with investors wary of potential daily fluctuations in tariff rates. While a temporary tariff reprieve offered a brief respite, it failed to address the underlying uncertainty. The European Union extended its retaliatory tariffs on the U.S. by 90 days, seeking a resolution, while Canada expressed willingness to lift its retaliatory tariffs if the U.S. reciprocates. China, in response, is negotiating with the EU to eliminate tariffs on Chinese electric vehicles, though concerns over quality issues—such as fires and spontaneous combustion—have dampened local demand, raising fears of adverse impacts in Europe. China has retaliated by selling off U.S. Treasuries, reducing screenings of American films, and producing AI-generated videos mocking U.S. manufacturing. Trump has expressed optimism about negotiations with China and the UK, hinting at a potential long-term resolution, and described his relationship with Xi Jinping as one of longstanding friendship. The decision to pause tariffs was driven by concerns over a bond market collapse, with Trump acknowledging the risk of a recession and his desire to avoid an economic downturn.

U.S. Equities and Economic Trends

U.S. equity markets experienced significant declines due to tariff uncertainty, though losses moderated by the close of trading. The dollar index fell to 100.85 points, while gold prices soared to a record $3,200, potentially paving the way for Bitcoin’s recovery. Arthur Hayes, a prominent market commentator, suggested that heightened U.S. equity market volatility could benefit Bitcoin, predicting a sustained upward trajectory without significant crashes.

Cryptocurrency Market Analysis

Bitcoin remains in a bearish phase, with on-chain indicators like the IFP showing continued movement to spot exchanges, signaling weakness. The cryptocurrency failed to break above its 22-day moving average, and key resistance levels remain untested, with the RSI unable to surpass the neutral 50 mark and the MACD indicating persistent bearish momentum. Stablecoin trading volume data reveals that 30-day volumes are below the annual average, confirming the bearish sentiment. However, historical patterns (e.g., March 2024) suggest a potential rebound following similar conditions, making the current period an opportune time for dollar-cost averaging (DCA). On a logarithmic scale, Bitcoin is positioned near the lower midpoint, close to oversold territory, indicating that the major bull rally has yet to commence.

Trends in Bitcoin and Cryptocurrency Markets

Despite Bitcoin’s upward movement, spot Bitcoin ETFs saw outflows of $127.2 million, with BlackRock recording $89.7 million in Bitcoin ETF outflows and $5.5 million in Ethereum ETF outflows, raising concerns about waning investor confidence. However, CryptoQuant data highlights significant accumulation by whales holding 1,000 to 10,000 BTC, with $3.6 billion flowing into accumulation addresses—the largest single-day inflow since February 2022. Large whales have been selling, while smaller whales are shifting to buying, hinting at a potential shift in market sentiment. Canadian listed company Net increased its Bitcoin holdings from 376 to 401 coins, expressing confidence in Bitcoin’s future. World Liberty Financial, operated by the Trump family, denied rumors of a massive Ethereum sell-off, asserting no assets were sold.

Expert and Analyst Perspectives

Charles Hoskinson (Cardano founder) and Arthur Hayes both forecasted Bitcoin reaching $250,000 by the end of 2025, citing the adoption of cryptocurrencies by tech giants and increased liquidity from Federal Reserve rate cuts as catalysts. Hoskinson downplayed the impact of the tariff war, while Hayes noted Bitcoin’s resilience amid U.S. equity market volatility. Anthony Pompliano (Pump Investments) predicted all-time highs for both equities and Bitcoin by the end of 2025. Conversely, Peter Brandt labeled the recent U.S. equity rally a "dead cat bounce," warning of a potential Bitcoin drop to the $60,000 range, while analyst Roman projected a decline to $76,000 with further downside risk.

Brian's Outlook

The market is currently under pressure due to tariff uncertainty, with Bitcoin exhibiting a bearish trend but showing resilience compared to past corrections (e.g., 53% in 2021). Stablecoin trading volume data indicates a favorable buying opportunity, making dollar-cost averaging (DCA) a prudent strategy. Despite the current market downturn and the influx of negative news, this could be a golden opportunity for long-term investors. From a broader perspective, the present dip may well be an attractive entry point, offering a chance to capitalize on future gains. If you have the financial capacity, now might be the time to consider courageously accumulating positions through DCA, as the current market conditions could prove to be a strategic moment for those with a long-term vision. Alternatively, awaiting a recovery to the $80,000–$86,000 range could signal a trend reversal, offering a safer entry for those preferring to observe. In the short term, tariff uncertainty and U.S. equity market volatility may drive Bitcoin lower, potentially to $76,000 or the $60,000 range. However, over the medium to long term, the resolution of tariff issues and Federal Reserve rate cuts could trigger a significant rally, with the potential for Bitcoin to reach $250,000 as forecasted by Hoskinson and Hayes. The logarithmic chart suggests the major bull rally is yet to begin, maintaining a bullish long-term outlook.

Important Notice:

This report is for informational purposes only and reflects the opinions of BMERIN Research & Investment as of the date of publication. It is not intended as investment advice or a recommendation to buy or sell any financial product. Market conditions may change and BMERIN assumes no responsibility to update this material. Always consult your financial advisor before making investment decisions.