Trump's Economic Policy: From Tariffs to Encryption Assets

On the evening of March 3, President Trump announced the imposition of tariffs on Canada and Mexico, to take effect on April 2. This decision shattered hopes of avoiding comprehensive tariffs.

As a result, Bitcoin fell by 8% within 48 hours. At the same time, U.S. stocks were also hit, with the Nasdaq index dropping by 2.6%. In just over a month since Trump took office, the market capitalization of the encryption market has evaporated by 22%. Stocks of Trump-related companies fell by 34.75%. Even Elon Musk, who has always supported Trump, was not spared, with Tesla's stock price dropping by 32.87%.

Trump's policies are affecting the nerves of the encryption market, presenting a situation of "success and failure both depend on Xiao He." In 2025, a special study focusing on the impact of the Trump 2.0 government on the encryption market will emerge. Previous research pointed out that the market should pay attention to real liquidity rather than news and public opinion, and indicated that without substantial liquidity support, a mere increase in foreign exchange would be difficult to sustain. According to the latest data, since February 28, the TGA account has stopped injecting liquidity into the market, having injected a total of 304.89 billion dollars before.

The tariff policy, as the first move of the Trump administration, has had a tremendous impact on the global risk market with "American attributes." The Trump administration seems to have a fondness for such destructive policies. This article will analyze the deep strategic intent of Trump's "tariffs in the left hand, encryption in the right hand" within the framework of the trade war.

Tariffs: A Complex Bargaining Chip

Trump's imposition of tariffs is ostensibly aimed at reducing the trade deficit and boosting employment and the economy. However, historical experience shows that this is not a wise move. Data from the U.S. Congressional Budget Office indicates that the trade war from 2018 to 2019 resulted in a 0.3% loss in U.S. GDP, approximately $40 billion. Other studies also point out that tariff policies have led to job losses and production relocation.

The core purpose of tariff policy may not be limited to the movement of goods, but also involves technology, capital flows, and currency competition. It has a profound impact on the global financial system, affecting everything from foreign exchange markets to stock markets, from government bonds to risk assets.

For the encryption market, as participants in the global risk asset market, its performance is closely related to the fluctuations of U.S. tech stocks. Whether it is the reliance on Bitcoin mining equipment or the inclusion of crypto-related companies in the Nasdaq index, U.S. financial policies and regulations are increasingly impacting the encryption market.

In the future, the market's reaction to the impact of tariffs may depend on the responses of other countries. If other countries choose to make concessions, it could be beneficial for U.S. assets in the short term; if other countries retaliate strongly, it may have a negative impact on risk assets.

Encryption Assets: Extraordinary Means in Extraordinary Times?

The Trump administration announced the establishment of a national reserve for encryption assets, which on the surface appears to be financial innovation, but may in fact be an unconventional means to respond to the current situation.

In the face of the dollar credit crisis and extreme monetary policies, the United States urgently needs new leverage to maintain global capital trust. Encryption assets may become a new type of "quasi-financial weapon": once strategic-level reserves are mastered, the government will gain greater maneuverability in global capital flows.

At the same time, the global trend of "de-dollarization" is evident. The escalation of the trade war has prompted countries to accelerate the allocation of non-dollar assets to hedge against risks in the dollar system. The rise in gold prices at the beginning of 2025 is a clear evidence of this. In this context, if encryption assets can maintain their decentralized characteristics and are not manipulated by a single country, they may gain new geopolitical premiums in the global financial game.

The Trump administration seems to be trying to reshape the international political and financial order established after World War II. Instead of directly strengthening the credit of the dollar, establishing a reserve of encryption assets provides the government with more means for indirect intervention in the market. With the development of encryption technology, a new cross-border payment system may emerge in the future, and it could even evolve into a state-led encryption financial network.

Trump is described as a "fighter" who is keen on quickly reaching deals and defeating opponents. However, in a complex trade war, the rush to reach new agreements and "defeat opponents" may not be the best strategy. The challenge facing the Trump administration is how to protect American interests while avoiding triggering global economic turmoil.