Crypto Daybook Americas: Market Decline Driven by Tariffs

What to Know

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Market Overview

Fear has engulfed financial markets due to tariff announcements by President Trump, with stocks in Hong Kong experiencing a historic drop of 14%, their biggest since the Asian Financial Crisis of 1997. In concert, Taiwan and Japanese stocks fell 10%.

European stock markets also suffered, with the FTSE 100, DAX, and CAC 40 all declining more than 5%.

The cryptocurrency market was not spared from this turmoil. Bitcoin (BTC) saw a 10% drop, falling below $75,000, while Ethereum (ETH) plunged by 22%. Additionally, XRP and SOL dropped more than 20%, and DOGE experienced a decrease of over 15%. Bitcoin now holds a dominance of 63%, a level not reached since early 2021. The CoinDesk 20 index lost nearly 12% in just one day.

U.S. equities have begun the week at a loss, with the S&P 500 entering bear market territory—down 20% from its historical peak and 5% in pre-market trading, poised for what could be its worst three-day performance ever.

Global Reactions

China’s stocks, down 7%, are reportedly looking into front-loading stimulus measures to counter Trump’s tariffs. Last Friday, China stated a 34% reciprocal tariff on all U.S. goods.

Investor Insights

Bill Ackman has indicated that Secretary of Commerce Howard Lutnick does not seem worried about a potential economic downturn, suggesting that Lutnick and his former firm, Cantor Fitzgerald, might be positioned to profit from a downturn by holding long bonds.

Looking Ahead

Expect countries to scramble to offset these tariffs. Nations like Argentina, Taiwan, and India are already hinting at reducing tariffs on U.S. imports. This continuing uncertainty is expected to keep the markets volatile as the Volatility S&P 500 Index (VIX) hit 60 in pre-market trading, the highest it has been since August 2024.

What to Watch

Crypto: Syscoin (SYS) activates the Nexus upgrade on its mainnet at block 2,010,345.
Macro: Tariffs from the Trump administration on imports from major trade deficit countries will take effect soon. These include China’s retaliatory tariffs.
Earnings: No earnings scheduled.

Conclusion

Investors should remain vigilant in these uncertain times as market dynamics shift rapidly.