Global markets are experiencing significant disruption due to the 100-year high US tariffs, with stocks from Sydney, London, and New York experiencing significant losses. Treasuries plunged along with stocks, with government borrowing costs on debt surging across countries.
Trump announced on Wednesday that beginning April 5, all imports into the United States will be subject to a minimum 10% tax and that around 60 countries with the biggest trade deficits with the United States would be subject to additional penalties.
While Tuesday saw some calm in Asian markets, the European and American stocks roiled. On Wednesday, when the tariffs came into effect, the mayhem across asset classes was deep-rooted, though some reprieve came later in the day as Trump made a U-turn, announcing a 90-day pause on reciprocal tariffs for countries that do not retaliate.
The stock market has experienced unprecedented volatility as a result of President Trump's slew of tariffs on US trading partners, which has caused price swings that rival those of the oldest cryptocurrency.
This break from tradition marks a change from the historically correlated pattern of bigger price swings for Bitcoin relative to equities.
Tokens issued digitally will not be significantly affected by tariffs, unlike the shares of many corporations that make up key US equities indices.
Market analysts attribute Bitcoin's resilience to modest premiums on Bitcoin futures, a subdued increase in options for short-term protection, a manageable level of leverage, and supportive crypto-friendly legislation in the US.
While Bitcoin has turned less volatile compared to stocks amid tariff-led chaos, the global trade wars are threatening to upend Bitcoin mining supply chains rooted in Asia.
There has been a scramble recently for Asian miners to ship Bitcoin mining machines from Asia to the US before the high Trump tariffs on the region kicked in on Wednesday.
These actions demonstrate the chaos that has descended upon the Bitcoin mining sector as a result of Trump's tariff announcement.
With many large miners having US headquarters and their supply networks set up in Asia, the industry is caught in Trump's trade war.
Bitcoin transactions are validated, and rewards are earned by "mining," the process of solving mathematical puzzles using specialized computers.
The competitiveness and profit margins of US crypto miners are being jeopardized as new equipment is taking longer to arrive, all because the Chinese behemoth that provides much of their gear is under scrutiny due to the trade war.
After China banned cryptocurrency mining in 2021, the United States quickly became one of the world's leading centers for the activity.
US-listed miners have recently raised billions to fund the construction of data centers in energy-rich states like Texas and the acquisition of specialized computers from Chinese suppliers such as Bitmain Technologies, the largest manufacturer of Bitcoin mining equipment, based in Beijing.
Reports indicate that an increase in Customs and Border Protection inspections has caused a delay in the shipment of equipment manufactured by Beijing-based Bitmain Technologies to customers in the United States.
The setbacks occur at the same time that Bitmain's AI subsidiary, Xiamen Sophgo Technologies, was blacklisted in January by the US Department of Commerce, which accused the company of "acting at the behest of Beijing to further the PRC's goals of indigenous advanced chip production."
Two of President Trump's agenda items are at odds with one another in this situation: increasing trade dominance over China and encouraging domestic cryptocurrency mining to guarantee that Bitcoin remains "Made in the USA."
With a 90% market share for Bitcoin mining specialized PCs, Bitmain is already facing tariffs imposed by Trump in 2018.
Following Trump's statement last week, the stock of Bitcoin miners listed in the US, including CleanSpark and MARA Holdings, experienced significant declines.
Ongoing expansion in the sector will be impeded by the recent tariffs.
Trump imposed taxes on Chinese electronics and other imports in 2018, prompting Bitmain to relocate production to the area.
In light of Wednesday's declaration, the average tax on Chinese exports has hit over 100%.
A mining operator's purchasing costs have increased by over 20%, and machine costs account for a significant amount of crypto miners' capital expenditures.
That implies their return on investment will be severely affected.
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Blockcast
Inside the Crypto & AI-Powered Adult Playground with Oh's Nic Young
Ever wondered what happens when AI, crypto, and the adult entertainment industry collide?
This week, Blockcast delves into the developing space of digital interaction with Nic Young, CEO of Oh, a platform at the forefront of integrating artificial intelligence and cryptocurrency within the adult entertainment industry. Nic unpacks how Oh is building AI-powered digital companions, including realistic twins of creators, offering a personalized and uncensored experience underpinned by crypto transactions: "We felt that it was the perfect incubator... an industry that really needs crypto."
Blockhead
Blockcast is hosted by Head of APAC at Ledger, Takatoshi Shibayama. Previous episodes of Blockcast can be found on Podpage, with guests like Jacob Phillips (Lombard), Chris Yu (SignalPlus), Kathy Zhu (Mezo), Jess Zeng (Mantle), Samar Sen (Talos), Jason Choi (Tangent), Lasanka Perera (Independent Reserve), Mark Rydon (Aethir), Luca Prosperi (M^0), Charles Hoskinson (Cardano), and Yat Siu (Animoca Brands) on our most recent shows.
