The US-China trade war and its ripple effects across markets, currencies, and cryptocurrencies like Bitcoin are the key highlights. Today, on April 9, 2025, the world is holding its breath as the clock ticks toward a midnight deadline (ET) when the United States could impose a staggering 50 per cent hike in tariffs on Chinese goods, pushing levies to an unprecedented 104 per cent.
China’s Commerce Ministry has fired back with a resolute declaration: “If the US insists on its own way, China will fight to the end.” This escalating tit-for-tat has plunged global risk sentiment into a tailspin, and from my vantage point, it’s clear that the fallout is reshaping the financial landscape in ways that are both profound and unpredictable.
Looking at the equity markets, where volatility has become the name of the game. The S&P 500, a bellwether of US economic health, experienced a rollercoaster session yesterday. It surged over four per cent in early trading, buoyed perhaps by fleeting optimism or speculative positioning, only to surrender those gains and close 1.6 per cent lower. This left it teetering on the edge of bear market territory—defined as a 20 per cent drop from its recent peak. The NASDAQ, heavily weighted with tech stocks sensitive to global trade dynamics, fared even worse, shedding 2.15 per cent after a similar wild swing from a four per cent gain.
Meanwhile, the Dow Jones Industrial Average dropped 349 points, a decline that, while less dramatic in percentage terms, underscores the broad-based anxiety gripping Wall Street. The CBOE Volatility Index, often dubbed the “fear index,” spiked another 11.4 per cent to 52.33—a level that screams panic and reflects a market bracing for more turbulence. From my perspective, these gyrations aren’t just noise; they’re a visceral response to the uncertainty of a trade war that threatens to upend global supply chains and corporate earnings.
The bond market tells a complementary story. US Treasury yields presented a mixed picture yesterday, with the two-year yield retreating as investors sought short-term safety, while longer-term yields—like those on the 10-year note—climbed higher. This steepening of the yield curve followed a lacklustre auction of 3-year notes, which triggered a selloff in longer-dated bonds. To me, this suggests a market grappling with conflicting signals: fear of an economic slowdown driving demand for safe-haven assets, yet persistent inflationary pressures tied to tariffs keeping longer-term yields elevated.
The US Dollar Index weakened by 0.3%, a modest dip that nonetheless handed gains to safe-haven currencies like the Swiss franc and Japanese yen. Gold, often a barometer of global unease, held steady at US$2,983.27 per ounce—not a dramatic move, but a sign of its role as a quiet anchor amid the storm. Brent crude oil, however, slid 2.2 per cent to US$62.82 per barrel, reflecting fears that a trade war could sap global demand. As I see it, these asset movements paint a picture of a world economy on edge, with investors hedging bets and seeking shelter wherever they can find it.
Also Read: US-China trade war escalates: Bitcoin falls below US$78K amid market chaos
Now, to Bitcoin, which has been a fascinating subplot in this saga. Just days ago, the cryptocurrency briefly breached the US$80,000 mark—a rally that sparked hope among bulls that it could defy the gathering storm. But that optimism has evaporated. As of April 8, Bitcoin had slipped below its US$76,000 support level, trading at US$76,193—a drop that erased much of the “Trump pump” gains from late last year. Technical analysts are pointing to a “death cross” forming on the charts, where the 50-day moving average crosses below the 200-day moving average, a bearish signal that often heralds prolonged declines.
From my vantage point, this reversal isn’t surprising. Bitcoin’s recent bounce felt more like a panic rally—fuelled by speculative fervor rather than fundamentals—than a sustainable trend. The harsh reality is that Trump’s tariffs, combined with China’s retaliatory measures, are creating a global financial crisis that even crypto can’t escape. The notion that Bitcoin is a decoupled asset, immune to traditional market forces, is being tested and, frankly, debunked in real time.
The cryptocurrency market’s woes extend beyond Bitcoin itself. Bitcoin exchange-traded funds (ETFs), which had gained traction as a bridge between crypto and mainstream finance, are hemorrhaging capital. Data from Farside Investors shows US$256.6 million in outflows from these funds in April alone, with only one day of positive inflows so far. April 1 marked the largest single-day exodus at US$157 million, while BlackRock’s IBIT ETF, a heavyweight in the space, saw a US$65 million inflow on April 2 but also suffered the biggest intra-day loss.
This flight of capital reflects a broader investor unease, amplified by Trump’s tariff policies and the spectre of a US recession. Mark Carney, Canada’s Prime Minister, recently weighed in, warning that these tariffs heighten the odds of an economic downturn south of the border—a view that aligns with growing chatter among economists and market watchers. For me, Carney’s comments underscore a critical point: the interconnectedness of global economies means that no asset class, not even crypto, can fully insulate itself from macroeconomic shocks.
The interplay between tariffs and Bitcoin is particularly intriguing. Some, like former BitMEX CEO Arthur Hayes, had argued that cryptocurrencies might weather tariff-induced turbulence better than traditional assets, given their decentralised nature. But the data tells a different story. The Crypto Fear and Greed Index, a sentiment gauge, has plunged into “fear” territory, mirroring the VIX’s climb in traditional markets. Bitcoin’s correlation with equities, while not absolute, has tightened in recent weeks, suggesting it’s behaving more like a risk asset than a safe haven.
Also Read: Trump tariffs shake markets: Why gold soars as Bitcoin stumbles in 2025
China’s “revenge” tariffs—reportedly an additional 34 per cent on US goods—have only deepened the gloom, raising the stakes in this trade war and threatening to disrupt everything from manufacturing to consumer prices. As I see it, the hope that crypto could serve as a hedge against such chaos is fading fast, replaced by a stark realisation that it’s caught in the same web of uncertainty as stocks and bonds.
Looking beyond the US, the global ramifications are equally stark. Asian equity indices opened lower today, tracking Wall Street’s losses and bracing for the tariff deadline. Japan and South Korea, key US allies, are reportedly in “highly tailored” deal talks with the White House, as President Trump’s economic adviser Kevin Hassett hinted at a broader tariff strategy still taking shape. Hassett told reporters that a plan is being prepared for Trump to decide “who and when” for these talks, but the situation remains fluid.
For me, this ambiguity is a double-edged sword: it keeps markets on tenterhooks, but it also opens the door to potential de-escalation if cooler heads prevail. Fed fund futures, meanwhile, are now pricing in four interest rate cuts for 2025—a dovish shift that signals growing recession fears, even as inflation risks from tariffs loom large. It’s a tightrope walk for the Federal Reserve, and one that could dictate the trajectory of both traditional and crypto markets in the months ahead.
So, what’s my take on all this? I see this as a pivotal moment—one where the hubris of protectionism is colliding with the fragility of a globalised economy. Trump’s tariffs, while rooted in a desire to bolster US manufacturing, risk igniting a wildfire of retaliation and economic contraction. The markets, from the S&P 500 to Bitcoin, are screaming for clarity, but none is forthcoming.
China’s resolve to “fight to the end” only heightens the stakes, promising a protracted battle that could drag down growth worldwide. For Bitcoin, the dream of it being a “digital gold” untethered from earthly woes feels increasingly distant; it’s a speculative asset caught in the crossfire, not a sanctuary. The US$256.6 million in ETF outflows this month is a testament to that reality—investors are spooked, and they’re voting with their wallets.
In the end, we’re left with a market wrap that’s less a conclusion and more a cliffhanger. Tonight’s tariff deadline could mark a turning point—or just another chapter in a saga of volatility.
My gut tells me we’re in for more rough seas, with the potential for a US recession casting a long shadow over 2025. Whether it’s the VIX at 52.33, Bitcoin at US$76,193, or the S&P 500 flirting with a bear market, the numbers don’t lie: fear is in the driver’s seat.
As I pen this on April 9, 2025, at 12:23 PM +08, the world watches and waits—and so do I, ready to chronicle whatever comes next.
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