US President Donald Trump introduced many tariffs on April 2, sending the market to tailspin, splitting the crypto observer on the possible long-term impact.
At a special event at the White House, Trump signed an executive order, claiming emergency situations, leveling off mutual tariffs in all countries with tariffs on US goods starting at a minimum of 10%.
The long-term impact of this new tax on global markets is unknown. Uncertainty is exacerbated by the ambiguous methodology the Trump administration used to determine tariff rates.
We believe the crypto market is set to boom as investors are looking for alternatives to traditional investments. Others have hampered profitability by pointing out that tariffs may interfere with the impact that could have on mining equipment. Furthermore, they are concerned about the broader impact of tariffs and the possibility of a recession.
https://www.youtube.com/watch?v=hgt-0d6wjr8
Trump’s tariffs “providing certainty” to the market
Financial markets crashed quickly on tariff news, and crypto markets were no exception.
Bitcoin (BTC) nearly reached a high session at $88,500, but returned 2.6% to around $83,000. Ether (ETH) fell from $1,934 to $1,797 shortly after the tariff announcement, with Crypto’s total market capitalization down 5.3% to $2.7 trillion.
Crypto shows red all over the board after Trump’s customs order. Source: Coin360
Some market analysts remain unshakable. Trader Michael Van de Poppe wrote that tariffs were “not as bad as the whole population would expect.”
“Uncertainty goes away. Money falls. ‘Buy rumors, sell the news,'” he said. “Altcoins and Bitcoins are rising. “Sell rumors and buy news.”
Bitmex founder Arthur Hayes said tariffs could reduce the trade deficit, but low exports could limit demand for the US Treasury Department, and said domestic intervention from the Federal Reserve is needed to stabilize the market.
“The Fed and banking systems need to step up to ensure a functioning Treasury (market), which means BRRRR,” he said.
“BRRRR” – referring to more money in spare printing is a theory Hayes had previously suggested, suggesting that increasing liquidity could be positive for Bitcoin prices as it enters the market.
How about crypto miners?
American crypto miners are directly affected by markup of goods imported from Asia, namely crypto mining rigs, which may cause less of a source of customs optimism.
“We are committed to providing a wide range of services,” said Mitchell Askew, head analyst for corporate blockware solutions at Mining-as-a-Service. “Taxes have a major impact on Bitcoin miners.
Blockware CEO Mason Jappa said tariffs will have a “significant impact” on Bitcoin mining. “Most of the current imports of Bitcoin mining servers came from Malaysia/Thailand/Indonesia. Rigs that have already landed in the US are more valuable,” he writes.
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Some mining companies are already in a hurry to retrieve mining rigs from exporting countries before tariffs take effect. Lauren Lin, head of hardware at Bitcoin Mining Software Firm Ruxor Technology, told Bloomberg on April 3 that her company was “scrambling.”
“Ideally, you can charter flights and get machines. You’re trying to be as creative as possible to get these machines out,” she said.
The questionable mathematics of tariffs, “extraordinary nonsense,” the looming recession
A handy tariff rate chart displayed at a signature event at the White House questioned exactly how the Trump administration came up with numbers and why a particular country was chosen.
James Slowiecki, Yale’s review editor, wrote that rather than actually calculating tariff rates and non-tariff barriers to determine their fees, they “were taking the trade deficit with the country and splitting it by the country’s exports.”
“What an extraordinary nonsense this.”
Some have come to the theory that the administration uses ChatGpt to come up with countries and numbers. NFT collector DCINvestor said that the list can be replicated almost exactly through the generation AI prompt.
“I was able to replicate it in ChatGpt. It also taught me that the idea had not been officially made anywhere before and that it was something that came up with. The FFS Trump administrator is using CHATGPT to determine trade policy,” he said.
Also note: some of the small countries and territories on the White House list. The full list reported by Forbes imposes 10% tariffs on the Heard Islands and the MacDonald Islands, in accordance with their 10% obligation in the US.
The Heard Islands and MacDonald Islands are the furthest locations on the planet, 1,600 km from Antarctica, uninhabited, barren and in some places. No one lives there. There is no trade.
The island heard the snowy rocks. Source: Wikipedia
The content of the questionable mathematics and tariff list doubts the regime’s economic accounts.
Nigel Green, CEO of Global Financial Advisory Giant Devere Group, told Cointelegraph that the president is “a peddler of economic delusions.”
“This is the earthquake day of world trade. Trump is blowing up the postwar system that has made the US and the world more prosperous, and he is doing it with reckless confidence,” he said.
Related: Lawmakers claim Trump wants to replace the US dollar with his stablecoin
Adam Cochrane, a partner at Cinneamhain Ventures, said tariffs “work well on most of these things” when targeting industries that also have current production to offset the increased costs of imported goods.
“The US has none of that, no factories for it, no workers to offset it, no raw materials for it. So you’re going to pay more for the same profit.”
At the end of March, Goldman Sachs had already leaned a chance for a US recession at 35%. After Trump signed the order, the calsi betting market increased it to over 50%.
The betting market is not betting on the American economy. Source: Kalshi
Trump, on his part, argued that tariffs would “make America great again,” and would make the US economy competitive with its former allies and trading partners. In his signature speech, he argued that the Great Repression of the 1930s would never have happened had the tariffs been maintained.
Smoot Holy’s tariff law, which raised tariffs during depression, is widely believed to be a contributor to worsening depression, and is synonymous with disastrous economic policy decisions.
https://www.youtube.com/watch?v=yuohbyuanby
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