Massive obedience testing, how will Trump's "stunt" affect the future direction of the cryptocurrency market?

Author: Fairy, ChainCatcher

Editor: TB, ChainCatcher

In April, a series of "tariff dramas" unfolded, and Trump once again stirred up a storm in the global market.

However, this time, it seems that he is wielding the tariff stick not just for economic interests. Tariffs appear to have become a means of "compliance testing"—Trump is attempting to gauge the tolerance and obedience of global economies to the U.S. hardline policies.

With his "tricky maneuvers," the world economy quickly plunged into the abyss of uncertainty: stock markets were in disarray, foreign exchange markets were volatile, and the crypto market was dragged down as well, with Bitcoin's price experiencing a rollercoaster ride, as panic and speculative sentiments intertwined and spread.

In this global game filled with uncertainty and testing, how will the crypto market develop next? The coming months may serve as a true test for the entire crypto market.

The Power Experiment Behind Tariffs

This tariff storm is no longer a traditional economic policy adjustment; it resembles a blatant behavioral psychology experiment.

"Who will comply? Who dares to resist? Who chooses silence?"

Trump acts like a puppeteer, creating uncertainty, carefully setting up variables, and observing the reactions of countries around the world. Tariffs are no longer merely economic tools; they have become his "compliance testing" button.

This round of "testing" has a tight rhythm: first, collective tariff increases create systemic pressure, followed by the introduction of a negotiation window to attract dialogue, then a pause on tariffs for most countries sends a signal of easing, and extreme pressure is applied to the "resistors."

Here is the timeline of the tariff events, revealing the rhythm of this "test":

"China's lack of respect for the world market has led me to announce an increase in U.S. tariffs on China to 125%. More than 75 countries have called U.S. representatives for negotiations, and these countries, at my strong suggestion, have not retaliated against the U.S. in any way. I have authorized a 90-day pause."

Trump's statement resembles a "phase testing report," simply translated as: "You behave, and I will pause for 90 days; you talk back, and I will raise tariffs to 125%."

However, this is far from over. The 90-day "pause" feels more like a buffer for silent observation. No one dares to conclude what Trump will do next. What is left for the global market is a thicker unknown and a deeper game.

This "compliance experiment" is deeply impacting the market. So, how will the crypto market's trajectory develop next?

Bitcoin's "Rollercoaster Market": A Bull Trap or the Start of a New Era?

In the past week, Bitcoin's price briefly fell below $77,000, but after Trump announced a 90-day pause on most countries' reciprocal tariffs, Bitcoin's price quickly rebounded, breaking through $82,000. However, the market has differing interpretations and views on the potential impact of this tariff policy.

Viewpoint 1: The Crypto Market's Rebound May Be a "Bull Trap," Caution is Needed

Crypto investment firm QCP Capital stated that Bitcoin's current rebound could be a "classic bull trap." They believe that while Trump's decision to pause new tariffs has led to a rise in Bitcoin and other cryptocurrencies, the tariff increase on China could provoke a strong counteraction from China, causing the market's excessive excitement to quickly turn into a bull trap.

QCP also pointed out that although the short-term policy adjustment has temporarily alleviated market anxiety, risks still loom. Market makers may take advantage of this rebound to offload, especially as selling pressure may emerge in the coming months. Therefore, QCP advises investors to remain cautious.

BTSE Chief Operating Officer Jeff Mei shares a similar view: "The market's upward reaction is based on expectations that most trading partners will negotiate trade agreements with the U.S. to avoid a full-blown trade war. That said, continued tariffs on China and China's counteractions will lead to a reconfiguration of global trade, potentially altering the way the world operates. We remain cautious until we see the consequences of this process unfold in the coming months."

Viewpoint 2: The Tariff Issue Will Become Hollow, Crypto May Experience a Surge in August-September

Charles Hoskinson, founder of Cardano, holds an optimistic view of the future crypto market. He believes that the tariff issue will ultimately become hollow, as the world recognizes that countries are willing to negotiate, and this is essentially part of the U.S.-China game. He points out that some countries will support the U.S., while others will support China, leading to a gradual stabilization of the market. People will adapt to this new normal, and the Federal Reserve may lower interest rates, with a significant influx of capital into the market, which will eventually flow into the crypto market.

He predicts: "The crypto market may stagnate in the next three to five months, but by August or September, there will be a surge of speculative interest that could last six to twelve months."

Viewpoint 3: Short-Term Volatility, Long-Term Adoption of Bitcoin May Be Driven

Grayscale believes that the global market's short-term performance will be influenced by trade negotiations between the White House and other countries. Although these negotiations may lead to tariff reductions, potential setbacks and retaliatory actions during the process will still exacerbate market volatility, bringing significant uncertainty to trade conflicts in the coming weeks.

Nevertheless, Grayscale points out that Bitcoin's price volatility is significantly lower than that of the stock market, and speculative traders in the crypto market hold relatively low positions. If macro risks ease in the coming weeks, they believe the crypto market will rebound.

From a medium to long-term perspective, Grayscale believes that increased tariffs may positively impact Bitcoin, especially when tariffs lead to economic stagflation and weaken demand for the dollar. As international trade patterns change, Bitcoin may be adopted more widely, particularly in a scenario of declining dollar demand.

Bitwise Chief Investment Officer Matt Hougan also believes that increased tariffs will lead to a depreciation of the dollar, and the inverse correlation between Bitcoin and the dollar index means that a dollar depreciation typically accompanies a rise in Bitcoin prices. In the long run, the weakening of the dollar may drive Bitcoin and other hard currencies to become emerging reserve assets.

Finding certainty in uncertainty, creating order in chaos. Since its inception, Bitcoin has weathered many storms; regardless of how Trump's policies change, the crypto market has proven its resilience in rooting itself amid uncertainty.

How the future unfolds remains elusive. All we can do is hold our breath and wait for time to reveal the ending of this grand drama.