Weekly Market Update: Global Trade Derailed

This past week, the financial and crypto markets were dominated by the escalating Trump Trade War. From the opening bell the fear and panic sparked by ‘Liberation Day’ was palpable, gripping investors and traders alike. In this week’s newsletter, we’ve aimed to distill the prevailing sentiment, key highlights, and broader implications of these turbulent events.

22 March 2025 – The Trump Train Revs Up: It starts with a cryptic Truth Social post: “Big announcement soon – America’s liberation is coming, folks!”. 

X (Twitter) explodes with speculation: “Tariffs? Crypto? Both?!” 

Crypto bros pray for another big Bitcoin nod, while hedge funds stack shorts on Chinese tech. The S&P 500’s jittery, up 2% one day, down 1% the next, as analysts add to the speculation. “He’s gonna tank the market!” one warns. Eventually the odds tilt toward chaos, and gold moves up 5% in March alone, sniffing out trouble.

Liberation Day, 2 April 2025 at 4pm (ET) – The White House Rose Garden is packed, flags waving and the usual cheers as President Trump struts out. He proudly proclaims “April 2nd 2025 will forever be remembered as the day we began to make America wealthy again”… dropping a 10% tariff on all U.S. imports and a 34% haymaker on China. The crowd goes wild, but the S&P500? It’s already dropping, shredding -$2 trillion in 15 minutes of futures trading. 

Bitcoin catches wind of the chaos and bolts up to $88,500 – but then panic flips the script, dragging BTC quickly lower to $83,000. Ethereum and Solana trip over each other on the way down, while Dogecoin yelps! $700 million in leveraged positions get torched.

Liberation Day +1, 9:00 AM (ET) – Reality sets in, we’ve just witnessed the biggest shift in global trade policy in nearly 100 years since the Smoot-Hawley Tariff Act of 1930 which hiked duties on 20,000+ imports, aiming to shield U.S. industries after the 1929 crash. Instead, it ignited a global trade war as nations retaliated, plunging world trade by 66% by 1934. It didn’t start the Great Depression – but it sure made it nastier.

President Xi scoffs at Trump’s bully tactics and announces retaliatory 34% tariffs on U.S. imports – and the market crash kicks into high gear as the U.S. stock market erases $3.1 trillion in value in the largest one day crash since ‘Covid March’. 

Amid the chaos, Bitcoin stabilises, clinging resiliently above $81,000 – showing signs of relative strength. The bulls seem to be chomping at the bit for another run, yet they remain stalled and waiting on the sidelines for the dust to settle.

Liberation Day +5 – real fear and panic has seized the markets as financial headlines and social media are abuzz with reports of limit-down circuit breakers tripping worldwide. Gold, the go-to safe haven, slumps below $3,000, while oil prices collapse amid soaring recession signals. The S&P 500 is officially back in bear market territory!

Bitcoin finally buckles under the relentless downward pressure, staggering down to a weekly close below $80,000.

As the week rolls on, rumors swirl of foreign leaders scrambling to the U.S. negotiating table as Trump threatens to raise the 34% tariffs on China to 50% – and the markets take a breather to assess the damage. But that is short lived as a defiant Xi starts selling U.S. treasury bonds and Trump confirms that the tariffs are actually an additional 50% raising the total to 104%.

After nearly a month of buildup and a few days of madness, Trump’s Tariff Train has derailed global markets and left traders and allies alike reeling, roaring and wondering: Is this really all part of Trump’s plan: short-term pain for long-term glory?

Market sentiment has fallen back into: Extreme Fear.

Highlights this week: 

• BTC held up relatively well through at the start of the broad markets ‘tariff tantrum’ (through the weekend) but closed the week down -$10k from the high at $78,342.
• The depth of the selloff saw BTC remain above the prior bull market highs even when many market commentators were calling for lower prices – but we could see another retest of those levels on escalating U.S. and China trade war.
• The latest ETF outflow data (to Monday 7 April) remained remarkably muted – suggesting much of the panic selling may have already taken place in the earlier BTC drop from ATH.
• Investor sentiment continues to get beaten down and the same with Google Search volumes for crypto search terms – this may take some time to recover.
• Major Alts continued to struggle after BTC buckled, with ETH making a 2 year low below $1,500 (down -22.6%) and SOL briefly dipping below $100 (down -16.2%).
• There were no real winners this week as the Trade War escalated and most of the crypto market retreated into the red.
• Of the top cryptos, NEAR took the biggest hit down -27.8% followed closely by Official TRUMP coin down -27%.

View all top gainers: Visit the top gainers page to find out more. 

Highlights from the crypto space

After crypto’s worst quarter since the FTX crisis, many investors are worried about the end of the bull market, but an industry panel including Messari CEO Eric Turner confidently claimed that the crypto bull market hasn’t started yet: “I actually think the real question is, when does the bull market come? If you ask me, that’s going to be Q3, Q4 of this year.” 

Raoul Pal of Real Vision shares similar optimism in an ‘Urgent’ video update on X (Twitter) where he points to global M2 spiking.

Blissfully detached from the market turmoil, Eric Trump has turned into a super crypto bull – claiming that he moved to crypto after his family business became “the most canceled company, probably on Earth” – he also said: “Bitcoin is one of the greatest stores of value, immediately liquid, and an unbelievable hedge against real estate”. 

Ethereum is down nearly 50% since his endorsement just 2 months ago.

Ripple is set to acquire prime brokerage Hidden Road in a deal to become the first crypto company to own and operate a global, multi-asset prime broker capable of offering institutions a one-stop-shop of services including clearing, prime brokerage and financing across foreign exchange (FX), digital assets, derivatives, swaps, and fixed income. 

Professor of Law at George Washington University has called stablecoins “an existential threat to the banking industry, as well as to the financial system” – claiming that higher than average interest stablecoin accounts could see people move their money out of insured bank accounts, opening them up to risk if those crypto companies were to fail.

Stablecoins are emerging as the first real blockchain use case to be fully integrated into traditional finance and we are witnessing the early stages of this transformation.

Binance ended Tether (USDT) trading in Europe last week to comply with new European Economic Area crypto asset regulations – users in the EEA can still custody the affected tokens and trade them in perpetual contracts.

The real winner here is Circle, the issuer of USDC, who recently announced plans to go public on the NYSE in April through an initial public offering. USDC’s market share has been rising, hitting a record 22% last week against its main rival, Tether’s USDT.

The First Digital US Dollar pegged stablecoin (FDUSD), a top 50 crypto by market cap, depegged last week following claims of insolvency from Tron network founder Justin Sun.

First Digital responded to the claims by assuring users they are completely solvent and FDUSD is still fully backed and redeemable 1:1 with the US dollar.

A developer has put forward a proposal to protect Bitcoin from the future potential risks of Quantum computing – proposing a hard fork Bitcoin to enforce a network wide migration from legacy wallets to ones secured by post quantum cryptography.

The proposal has been met with some skepticism on social media including a Reddit user pointing out that “this will leave everyone who doesn’t migrate vulnerable, including Satoshi’s coins”.

Bitcoin’s hashrate (measuring difficulty to mine) just set a new record high, but is diverging sharply from price and network activity – causing mining costs to continue to rise.

For miners to stay profitable and cover operational and capital costs, a strong bitcoin price, full blocks and high transaction fees are essential.

Michael Saylor’s (Micro) Strategy paused Bitcoin purchases last week as the Bitcoin price fell, disclosing a $5.91 billion unrealized loss in Q1, according to SEC filings.

Almost on cue, famed gold bug, Peter Schiff, didn’t miss his opportunity to rub some salt in the crypto market price action wound on Monday saying: “Attention Saylor, now that Bitcoin is below $80K, if you want to prevent it from crashing below your average cost of $68K, you better back up the truck with borrowed money today and go all in.”

In other crypto news…

• The SEC has acknowledged Fidelity’s application for a spot Solana ETF to trade on Cboe BZX Exchange.

• Chainlink announced payment abstraction is now live, allowing users to pay for Chainlink Services in alternative assets.

• The SEC acknowledged Fidelity’s application for a spot Solana ETF, an incremental step that edges the product closer to approval.

• Investors who bid on the REAL token project that was promoted by former UFC champion Conor McGregor will receive a full refund after the project failed to raise above the $1 million minimum requirement.

• Jack Dorsey’s Block and Stripe make a push into banking in an effort to become more comprehensive financial services providers.

• Ethereum developers have postponed the Pectra upgrade to May 7, 2025

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🌎 Macro news TLDR: Was crashing markets part of the plan?

Liberation Day has left even more questions than answers – and market uncertainty remains at extremely elevated levels as investors are left to ponder the many potential retaliatory scenarios. One thing is clear: Trump’s ‘America First’ agenda is causing a major upheaval to the global trade and financial system. 

But why such drastic moves? As of early 2025, total U.S. federal debt exceeded $36 trillion, with estimates suggesting that approximately $9.2 trillion will either mature or need refinancing in 2025 at the current relatively high interest rates.

In this second term President Trump seems more concerned about ‘solvency’ than pumping the stock market. 

Big problems require big solutions – and Trump has a ‘Three Arrows’ plan that is short-term pain for long-term glory: 

• Lower the U.S. budget deficit from its current levels (which have been around 6-7% of GDP in recent years) to 3% of gross domestic product with DOGE. 
• Boost economic growth to a sustained 3% per year. This would be pursued through pro-growth policies such as deregulation, tax cuts (including lowering the corporate tax rate to 15%) and increased business investment.
• Expanding U.S. energy production, equivalent to an additional 3 million barrels of oil per day by reversing restrictions on drilling with the aim of lowering energy prices, enhancing energy security, and reducing inflation pressures tied to fuel costs.

Liberation Day demonstrated to the world that America’s resolve is more than mere rhetoric – but will rival superpowers keep trembling and yielding as America rolls out its grand strategy, or will they seize the moment to assert their own strength?

U.S. economic news

“Liberation Day” lived more than lived up to its name as President Trump gave an impassioned speech announcing sweeping reciprocal tariffs on all imports coming into the U.S, including a new baseline U.S. tariff of 10%, causing global markets to plunge. 

The White House is calling the new tariff rollout “Make America Wealthy Again” which imposes steep rates on many countries, including 34% on China, 20% on the European Union, 46% on Vietnam and 32% on Taiwan. Will they come to the negotiating table or escalate the trade war with their own round of tariffs?

Immediately after the Liberation Day announcement, S&P 500 futures dropped -$2 trillion of market cap in under 15 minutes!

And then the U.S. stock market went on to erase $3.1 trillion in market value in the largest single day decline since March 2020.

American Billionaire and Hedge Fund Manger, Ray Dalio, gave a good explanation on X (Twitter) of the effects of tariffs and now they work.

U.S. Top Economic Advisor says that over 50 countries have already reached out for ‘meaningful negotiations’.

President Trump has also promised that “the largest tax cuts in history are coming, with no cuts to Medicare or Social Security” saying that America is entering a golden age where tariff revenue could potentially replace taxes and the Internal Revenue Service could be replaced by the External Revenue Service. 

The U.S. jobs report got lost in the swirl of chaos last Friday – March data showing a slight rise in jobless claims to 4.2% (up 0.1% on prior month). Employers added 228k jobs despite the DOGE cuts, but a lag in data is expected.

Unsurprisingly, recession concerns have skyrocketed again – and CEO of BlackRock said “many business leaders already believe the U.S. economy is probably in a recession right now.” 

President Trump has called on Fed Chairman Powell to accelerate rate cuts… 

Over in Europe…

The European Union has signalled its willingness to negotiate a tariff-free trade pact with the United States, but has indicated it is also prepared to retaliate if necessary.

The Euro Zone economy grew modestly for the third month in March, with the manufacturing sector showing some early signs of recovery, which might be attributed to factories frontloading in anticipation of U.S. tariffs. The Purchasing Managers’ Index (PMI) rose to 50.9 from 50.2 – still below the long-term average and only slightly above the 50 threshold for growth.

The war of words between the U.S. and Europe keeps escalating. France’s President Macron blasted Trump’s 20% tariffs on the EU calling them “brutal” – and the President of the European Commission said “The E.U. is preparing for further countermeasures to protect its interests”. Watch this space!

The E.U. is preparing for major penalties against Elon Musk and social media platform X for breaking a landmark law to combat illicit content and misinformation with rumours of up to $1 billion in fines. 

Israeli Prime Minister Netanyahu was the first foreign leader to meet with Trump post Liberation Day – promising to eliminate the trade surplus with the U.S. and “do it very quickly”. A move that may well influence other leaders in their approach.

And in Asia Pacific…

Japan’s Nikkei 225 suspended trading of stock futures on Monday due to limit down circuit breakers being triggered. And the Hong Kong Hang Seng plunged nearly 10% upon opening!

As one of the largest U.S. trading partners, Liberation Day awarded China with 34% tariffs on top of the existing 20% rates – which President Xi called “unilateral bullying” – on Friday, China announced 34% retaliatory tariffs on all goods imported from the U.S. 

In response, today President Trump has announced an additional 50% in tariffs (taking the total up to 104%) starting tonight! China vows it will “fight to the end” – raising the risk of an all out trade war which has hit the markets again today with another round of panic selling.

China’s state-run media has taken to the internet with AI-generated videos featuring dancing robots and panicked consumers rebuking President Trump and his tariffs that they say threaten high inflation and economic distress for Americans.

Australians are concerned about super balances as Prime Minister Albanese says he is concerned about Donald Trump’s negative impact on the markets. 

The RBA left their OCR unchanged at 4.1% at the 1 April meeting, just one day before the tariff chaos unfolded. 

Breaking news today as the RBNZ cuts OCR a further 25 basis points to 3.5% and says “Trump tariffs may mean more cuts to come” – which is music to the ears of homeowners and buyers.

That’s a wrap for this week!

Stay tuned for the next update

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