Global Stock Crash Triggered by Reciprocal Tariff—How Long Can Crypto Hold On
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Just as markets began to regain stability after a turbulent first quarter, a sudden wave of policy decisions sent shockwaves through global investors once again. U.S. President Donald Trump's signing of the Reciprocal Tariff executive order triggered a brutal three-day market crash, wiping out over $11 trillion from U.S. stock markets. The cryptocurrency sector, often seen as an alternative for risk-tolerant investors, wasn't spared either, as it plunged into a chain reaction. Some attribute the downturn to Trump's controversial economic shock therapy, while others view it as the dawn of a new economic order.
1. Behind Trump's Medicine Analogy: The U.S. Unleashes Reciprocal Tariffs
Just one week after President Trump signed the Reciprocal Tariffs Executive Order, global markets experienced their most severe crash in nearly 50 years. During an interview on his way back to Washington, Trump downplayed the stock market collapse, calling it necessary: "Sometimes, you have to take medicine to fix the problem." This comment sparked widespread panic, with Nasdaq 100 futures plummeting over 6% in response.
The "medicine" in question is the U.S. administration’s Reciprocal Tariffs policy. This shift in trade strategy means the U.S. will impose equivalent or even higher tariffs on countries that already levy high tariffs on American goods. This approach represents a fundamental departure from established multilateral free trade frameworks. While the administration characterizes this as promoting 'fair trade', economists warn it could potentially trigger far-reaching disruptions throughout global supply chains and send shockwaves through international capital markets.
2. $11 Trillion Gone in Three Days: One of History's Worst Crashes
According to The Kobeissi Letter, U.S. stock markets lost $11.1 trillion in value over just 44 trading days, amounting to approximately 38% of U.S. GDP. Major U.S. indices collectively dropped by over 15% in only three days, surpassing even the tumultuous days of the COVID-19 market collapse. This crash now stands as one of the worst in modern history, surpassing the Black Monday crash of 1987.
The collapse wasn't isolated to the U.S.—global markets tumbled in unison:
- Japan's Nikkei Index plunged over 2,500 points, triggering a futures circuit breaker.
- South Korea's KOSPI dropped 4.39%, activating a "sidecar" trading halt.
- Taiwan's TAIEX opened with a nearly 10% drop, with TSMC and Foxconn shares in freefall.
- Germany's DAX, the UK’s FTSE, and Euro Stoxx 50 Futures all tumbled sharply.
- S&P 500 Futures triggered a circuit breaker warning; if losses hit 20%, markets will close for the day.
Hedge funds, particularly in the crypto and stock markets, now face a margin call crisis reminiscent of Lehman Brothers' collapse, heightening fears of a systemic breakdown.
3. Crypto Market Plunges: $800 Million in Liquidations
Once considered a haven for risk-tolerant investors, the cryptocurrency market has been hit hard by the global financial storm:
- Bitcoin fell below $78,000, dropping 6.89% in 24 hours
- Ethereum lost the $1,600 level, plunging 13.19%
- Solana (SOL) tumbled below $110, down nearly 12%
The Fear & Greed Index dropped to 23, entering the "Extreme Fear" zone, reflecting the grim sentiment in global markets. In just 24 hours, 290,000 traders were liquidated, with over $893 million in liquidations—85% of which were long positions. The cryptocurrency sector, typically embraced by risk-tolerant investors as a high-volatility alternative to traditional markets, is now suffering alongside, offering no escape even for those with higher risk tolerance.
4. Global Responses: The Shifting Landscape of Trade
The Reciprocal Tariffs have triggered varied responses from countries worldwide:
- Vietnam, Argentina, and Israel have already canceled tariffs on U.S. products.
- India has shown signs of moving towards zero tariffs on U.S. goods.
- China quickly announced a 34% retaliatory tariff on U.S. imports.
- The European Union is set to vote on retaliatory tariffs on April 9.
Singaporean Prime Minister Lawrence Wong stated, "The era of rules-based globalization and free trade is over. We are entering a new phase – one that is more arbitrary, protectionist, and dangerous."
This market turmoil reflects not just a temporary fluctuation, but a deeper shift in the global trade order, with protectionism and geopolitical tensions reshaping the future.
5. Short-Term Panic, Long-Term Opportunities?
Amid the intense short-term panic, some investors see potential opportunities emerging. Arthur Hayes, co-founder of BitMEX, speculated, "If the MOVE volatility index in the bond market breaks above 140, the Fed may be forced to restart the money printer."
Kalshi’s prediction market shows the probability of a U.S. recession in 2025 is now at 68%, the highest in months. Even JPMorgan is voicing concerns, advising the Federal Reserve to cut interest rates ahead of their next meeting.
Despite the bleak outlook, top trader Eugene Ng believes this market downturn presents once-in-a-lifetime wealth-building opportunities for those with the right strategy. He advises, "Survival is the key." Meanwhile, Vida, founder of Formula News, sees this as a cyclical correction rather than a collapse reminiscent of the 2008 crisis. He predicts a market turning point in Q1 2026 and recommends gradually building positions during the downturn.
6. Final Thoughts: Navigating the Storm
Whether you believe in Trump's economic theories or whether you view the tariffs as heralding a new global order, one thing remains clear: the global market is in a new era of volatility and uncertainty. Today's market movements can no longer be understood solely through past experiences, but investors must adapt to the new norm.
In this uncertain environment, understanding risk management and staying calm in the face of volatility will be key. Capital needs a new anchor, and those who can navigate the storm may emerge stronger. As the financial landscape shifts, it’s vital to have a platform with the tools to weather the storm.
MEXC, a leading global digital asset exchange, offers not only fast token listings and deep liquidity, but also comprehensive risk management tools. Whether you're an experienced trader or just starting out, MEXC provides the resources to stay prepared and ready for the next turning point.
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