The bottom-fishing failed, and the market did not wait for good news. In the early hours of this morning, the White House press secretary announced that the additional tariff of 104% on China had taken effect at noon Eastern Time, and the global financial market plunged again.

On April 3, when Trump’s tariff policy was introduced, U.S. Treasury Secretary Benson issued a statement advising all countries not to take retaliatory actions and wait to see if there are any negotiations before April 9. They even staged the “fake news” drama again, hoping that Trump might be willing to negotiate on the trade barriers he has imposed on multiple countries and specific products, which would rebound and bring the global capital market back to life in a short period of time.

But after several days of bargaining, the market did not receive any good news. From 10% at the beginning of the year to 20% in March, and then to 34% in early April, and now with a 50% "retaliatory increase", the Sino-US trade friction has escalated into an "economic nuclear war."

If China and the United States engage in another trade war, can the stock market hold up?

Since the Trump administration announced a new round of tariff policies last week, the international capital market has experienced severe shocks, with the U.S. stock market bearing the brunt. As of the close of Tuesday, the S&P 500 index fell below 5,000 points for the first time in nearly a year, down 18.9% from its high on February 19, just one step away from the 20% "technical bear market" threshold. It is estimated that the market value of the S&P 500 index components evaporated by $5.8 trillion in four trading days, setting a record for the worst four-day losing streak since the index was established in the 1950s.

At the same time, the US tariff policy triggered a chain reaction in the global capital market. According to Bloomberg statistics, since Trump proposed the so-called "reciprocal tariff" on April 3, the total market value of global stocks has shrunk by $10 trillion, slightly more than half of the EU's GDP. US technology giants have become the hardest hit, with the market value of seven major technology companies such as Apple and Microsoft evaporating a total of $1.65 trillion. Among them, Apple's stock price plummeted by nearly 23% in four days due to its high dependence on overseas supply chains, marking the largest single-week drop since the outbreak of the epidemic in 2020.

Previously, many opinion leaders in the crypto community firmly believed that crypto assets would not be affected by traditional tariffs because their transactions do not need to cross borders and customs. They believe that in the face of a new era of mercantilism and trade barriers, the value proposition of cryptocurrencies is more prominent. Strategy founder Michael Saylor wrote on April 3 that "Bitcoin has no tariffs."

However, the total market value of cryptocurrencies has fallen 35% from its peak in December 2024, from $3.9 trillion to $2.5 trillion. The "Crypto Fear and Greed Index" shows 17, which is in the extreme panic range, indicating that market sentiment is pessimistic.

Last night, Bitcoin fell below $75,000 again. At the same time, BTC's market share continued to rise, the altcoin market was terrible, and Ethereum fell below $1,400 again.

In the past 12 hours, the crypto market has suffered a total liquidation of US$243 million, of which long positions have suffered a liquidation of US$192 million and short positions have suffered a liquidation of US$51.03 million.

The continued decline in Bitcoin prices may even force Strategy, which has been buying Bitcoin, to sell it. According to the 8-K form submitted by Strategy to the SEC on April 7, if Bitcoin prices continue to fall, Strategy may be forced to sell its Bitcoin holdings to repay debts, breaking Michael Saylor's promise to "never sell Bitcoin."

Since Trump won the election in November 2024, Strategy has bought 275,965 BTC (US$25.73 billion) at an average price of US$93,228, and this part has suffered a floating loss of US$4.6 billion.

Pessimistic expectations intensify. What do analysts think of the current market?

In the past week, several Wall Street banks, including Goldman Sachs and JPMorgan Chase, warned that if the trade war continues to escalate, the U.S. and even the global economy may fall into recession this year, which will further weaken the attractiveness of financial markets.

But the White House team is cheering victory. "We are bottoming out now, really bottoming out," Peter Navarro, Trump's chief trade adviser, said on Fox News on Monday night. "Then it will reverse, and the companies in the S&P 500 that are the first to shift production back to the United States will lead the recovery, which will happen soon. The Dow will be 50,000 points, I guarantee it, and there will be no recession."

However, Navarro's optimistic remarks were not shared by JPMorgan Chase CEO Jamie Dimon, who warned in his annual letter to shareholders on Monday that Trump's tariffs would push up prices, drag down the global economy, and weaken the United States' global position by undermining its alliance system. Even some of Trump's allies, including Elon Musk and Bill Ackman, have recently warned that the logic of this tariff policy is seriously flawed and is the wrong path.

Crypto analyst Phyrex believes that from the logic of the Fed's behavior, unless inflation falls significantly, even a "defensive rate cut" will be difficult to implement quickly. The real watershed may be when the US GDP data is released at the end of April.

From the perspective of the crypto market, BTC's turnover rate fell today. URPD data showed that even though the price fell below $77,000, investors in the 93,000-98,000 range hardly reduced their positions. This shows that the current selling pressure does not come from high-level holders, there has been no panic selling at the top, and the on-chain structure is relatively healthy. As long as subsequent policies are no longer frequently repeated, BTC and the risk market may still have room for a phased repair.

As Treasuries no longer serve as a safe haven, the 10-year Treasury yield has risen back to around 4.3%, higher than its level at the end of March, pushing up the cost of mortgages and other types of loans. The 30-year Treasury yield closed at 4.76%, up nearly half a percentage point from its lowest point on Monday. The spread between the two-year and 10-year Treasury yield curve widened to 48 basis points, the steepest level since May 2022.

Arthur Hayes, co-founder of BitMEX, wrote, "The Fed is running out of time and the situation is getting out of control. Previously, a stock market decline would lead to a decline in the 10-year U.S. Treasury yield, which was good for risky assets. Now the stock market is falling, accompanied by an increase in the 10-year U.S. Treasury yield, which is a bad thing. The market has finally realized that if the dollar export revenue decreases, there will be no more buying of bonds or stocks, and the game is over."

Pessimistic expectations are still strengthening. Trader Eugene wrote, "The introduction of global trade tariffs marks a change in the world order that has not been seen in more than 50 years. Free trade has been a key factor in driving productivity and economic growth, contributing to the world's largest long-term bull market in history. The shift from an open to a protectionist stance will have far-reaching consequences that will take years to gradually emerge, unless Trump completely abandons his tariff plan. I think the possibility of this is very low. This will pose considerable long-term resistance to global risk assets.

The recent structural decline in active developers is probably the most worrisome thing about crypto. During the last cycle, we could look at developer activity and take comfort in knowing that our industry was still benefiting from long-term tailwinds. Fast forward 2-3 years later, and not only have we not produced anything particularly interesting or significant, but the outlook for the future is even worse than it was then.

In the last cycle, we looked forward to the launch of ETFs and a better regulatory environment led by pro-crypto governments as the light at the end of the tunnel. Now that these have come to fruition, but (once again) have failed to live up to expectations, I don’t see anything in the future that can save crypto from its natural “Ouroboros”.

From a more macro perspective, the world is undergoing a major change that has not happened in a century. Ray Dalio, the billionaire hedge fund manager and founder of Bridgewater Associates, said in a statement that while the current market and economic focus on tariffs is important, deeper global issues should not be ignored. He pointed out that we are in the "classic collapse" stage of monetary, political and geopolitical order, which may only happen once in a lifetime, but has occurred many times in history.

Dalio suggested that we should not be distracted by short-term events such as tariffs, but should focus on the interaction of five major forces (economic, political, geopolitical, natural, and technological). Studying similar cycles in history (such as currency crises, etc.) can help predict the future.

"The current changes are part of a larger historical cycle. Tariffs are just a symptom. The real driving force is the structural collapse of the monetary, political and geopolitical order. Understanding the interaction of these forces and learning from historical experience will better prepare us for the future."