PANews reported on April 9 that QCP Capital, a crypto investment institution in Singapore, said that the overnight market decline widened after the United States imposed a new round of tariffs on China, with a total tax on Chinese imports reaching 104%. Market volatility remains intense, with the volatility index (VIX) remaining above 40 for the third consecutive trading day. Even traditional safe-haven assets have failed to play their expected role. Safe-haven assets have failed to provide an effective hedge, and gold and U.S. Treasuries have been sold off as investors have reduced risk and responded to margin calls. The Trump administration's strategy to refinance U.S. debt at lower interest rates has shown signs of strain, with yields on bonds of all maturities soaring. The 10-year U.S. Treasury yield once reached 4.50%, while the 30-year Treasury yield briefly broke through 5%. Credit spreads continue to widen, reflecting the overall deterioration of risk sentiment. Trump does not seem to have adjusted his strategy, but has adopted a Martingale-like strategy to double down on each retaliatory action. With China holding most of the initiative, the question becomes: How much more chips can the United States put in?
The market is currently pinning its hopes on two supporting forces, the "Trump Put" or the "Fed Put", to provide bottom support. But neither support seems to be imminent. With unemployment remaining stable and inflation showing signs of recovery, the Fed is likely to maintain current interest rate levels for the foreseeable future. This is in stark contrast to market pricing, which reflects expectations of four rate cuts by 2025, even including speculation of inter-meeting rate cuts. Bitcoin is consolidating around $75,000, but this level could collapse if the stock market falls sharply again. Ethereum continues to underperform and is falling towards $1,400, a level not seen since early 2023. Cryptocurrency income strategies are gaining renewed attention against the backdrop of increased market volatility. Elevated implied volatility provides attractive opportunities to earn carry through structured trades.
