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What does the crypto market look like under the shadow of the trade war?
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In April 2025, as the United States announced that it would increase tariffs on Chinese goods to 125%, the global market once again felt the familiar chill. The Chinese Ministry of Commerce responded quickly, saying that if the United States continued to play the tariff numbers game, China would ignore it and reserve the right to further retaliate. At the same time, the Trump administration offered a 90-day tariff suspension to 75 countries, reducing the general tariff rate to 10%, excluding China, Mexico and Canada. This highly targeted trade strategy not only increased the risk of decoupling between the Chinese and American economies, but also put the crypto market, a new battlefield for global capital flows, at a new crossroads.
History never repeats itself, but it always provides some kind of warning. The tragedy of the Smoot-Hawley Tariff Act in the 1930s was that countries collectively sank into a vicious cycle of retaliatory tariffs, which eventually led to the collapse of the international trade system. As one of the most destructive trade policies of the 20th century, the historical lessons of the Smoot-Hawley Tariff Act have profoundly warned contemporary decision-makers that trade protectionism has never been a good solution to economic difficulties. In 1930, the U.S. Congress passed this bill to raise import tariffs to an average of 59%, a historical high, with the original intention of protecting domestic industries hit by the Great Depression, but it triggered a disastrous chain reaction. The world's major trading partners quickly adopted retaliatory tariff measures, causing the international trade system to shrink by nearly two-thirds between 1929 and 1934, U.S. exports plummeted by 70%, and global unemployment further deteriorated. This policy not only failed to save the US economy, but also prolonged and deepened the Great Depression, exposing the fatal flaw of trade protectionism: in a globalized economy, unilaterally building high trade barriers will inevitably lead to a "boomerang effect." The more far-reaching impact is that the bill destroyed the foundation of international multilateral trade cooperation, fueled economic nationalism, and laid the groundwork for the subsequent collapse of the international economic order before World War II.
The Trump administration's Liberation Day tariff policy has caused severe shocks in global financial markets, and the crypto market has suffered a comprehensive impact. Bitcoin fell from $83,500 to $74,500, and Ethereum fell even more, from $1,800 to $1,380. The total market value of altcoins has been halved by more than 40%. Market liquidity has shrunk significantly, with Bitcoin's monthly capital inflows plummeting from a peak of $100 billion to $6 billion, and Ethereum's net outflow turned to $6 billion. Although there has been a large-scale capitulation sell-off, as prices fall, the scale of losses has gradually narrowed, indicating that short-term selling pressure may be exhausted.
From a technical perspective, $93,000 has become a key resistance level for Bitcoin to regain its upward momentum, and the $65,000-71,000 range is the core support area that bulls must defend. The current market has entered a critical stage. If the support level is broken, most investors will suffer floating losses, which may trigger a more drastic market adjustment. Overall, the crypto market is extremely sensitive to changes in global liquidity. The uncertainty brought about by this tariff policy has caused widespread impact. Whether the market can stabilize will depend on the subsequent policy direction and capital repatriation. In short, the crypto market is both a passive bearer and an active variable in this game. Imagine: when the international situation is tense and the global monetary system is in turmoil, where can investors find a scarce, global, and digital value storage method that is not controlled by any government or entity? Perhaps, when the credibility of the old order is eroded by the trade war, the seeds of the new system will quietly sprout.
