Trade friction escalates, triggering turmoil in global financial markets

Cross-Market Flash Crash Relay Race

On April 7, global financial markets experienced a significant drop amid panic over escalating trade frictions. Assets such as stocks, crude oil, precious metals, and cryptocurrencies all plummeted.

U.S. stock index futures continued the downward trend from last week, with Nasdaq 100 futures plummeting 5%, and S&P 500 and Dow futures both falling over 4%. The European market also showed a lackluster performance, with German DAX futures dropping nearly 5%, and European STOXX 50 and UK FTSE futures both exceeding a 4% decline.

The Asian market opened to a panic selling situation: the South Korean KOSPI 200 futures plummeted 5%, triggering a circuit breaker; the Australian stock index saw its decline expand from 2.75% to 6% within two hours; the Singapore Straits Times Index fell sharply by 7.29% in a single day, setting a record. The Middle Eastern market staged an early "Black Sunday," with stock indices in oil-producing countries like Saudi Arabia falling over 5.5%.

The commodity market is also filled with despair: WTI crude oil fell below $60, hitting a two-year low; gold lost the support level of $3010; silver's weekly decline expanded to 13%. In the cryptocurrency space, Bitcoin has fallen below a key support level, while Ethereum plummeted by 10% in a single day.

Impact on the cryptocurrency market

Significant short-term impact

The escalation of trade frictions has had a significant volatility effect on the crypto market. After the tariff policy was introduced in February, the crypto market experienced a decline linked to the stock market: Bitcoin fell by 8% within 24 hours, while Ethereum plummeted over 10%, triggering a liquidation of 900 million USD across the network.

Tariff policies affect the crypto market through multiple pathways: a stronger dollar encourages fund inflows; institutional investors may liquidate crypto assets to manage risks; inflationary pressures may reduce market risk appetite.

Long-term potential opportunities

Despite significant short-term shocks, tariff policies may create structural opportunities for the cryptocurrency market:

1. Expectations of liquidity expansion: The government may implement expansionary fiscal policies through tax cuts and infrastructure investment to increase market liquidity.

2. Strengthening Anti-Inflation Properties: If a trade war leads to the depreciation of the US dollar, Bitcoin may become a hedge tool due to its fixed supply characteristics.

Trump's Double-Faced Chess Game

Trump's tariff policy is essentially a business negotiation tactic that forces countries to renegotiate trade terms by setting a "threshold price." This approach resembles a procurement bidding process rather than a simple trade confrontation.

At the same time, Trump's words and actions also reflect a "dictator" tendency, including:

• Frequently using executive orders to bypass Congress
• Attack on press freedom, creating an "enemy"-style public opinion environment
• Interfering with judicial independence, emphasizing "loyalty over professionalism"
• Refuse to recognize election results, undermining the tradition of peaceful power transfer.
• Promoting personality cults and forming a "leader-centric" narrative

From the perspective of a "trader", Trump resembles a "super trader" who uses power, public opinion, and financial markets as tools. He is skilled at creating market volatility and seizing arbitrage opportunities through information control and policy decision-making.

The New Landscape of the Crypto Market

The current cryptocurrency market has become a new financial colony controlled by the combination of American capital and power. The approval of ETFs has allowed Wall Street giants to quickly establish BTC positions, and the prices of crypto assets are increasingly dependent on factors such as Federal Reserve policies and SEC regulations.

Bitcoin is gradually being shaped into a "non-sovereign reserve asset", becoming a hedge alternative under the expectation of a weakening US dollar credit system. The United States is quietly incorporating Bitcoin into its strategic financial resource pool by controlling crypto infrastructure and stablecoins.

In this new landscape, the cryptocurrency market has become an "extended battleground" of the American financial system. Market trends are increasingly dependent on the political games in the United States, with the price fluctuations being orchestrated by forces that control the news and traffic. This seemingly free market has actually been deeply orchestrated long ago.