A single social media post from Trump wiped out $2 trillion in market value, sending global markets into violent swings amid trade panic and a rush to safe havens. "No need to worry, everything will eventually get better!" U.S. President Trump attempted to soothe the markets via social media over the past weekend. However, investors remain on edge. On Saturday, his threatening remarks regarding trade relations triggered a global market shock, with U.S. stocks suffering their worst plunge since April and $2 trillion in market value evaporating. In early Monday trading, spot gold surged to $4,060/oz, hitting a new all-time high. This wave of market panic, sparked by Trump’s trade policies, is reshaping the global asset allocation landscape.
01 Market Turbulence: Risk Assets Rebound Across the Board
● In early Monday trading in Asian markets, market sentiment saw a clear reversal. U.S. stock index futures rebounded from Friday’s plunge, with S&P 500 futures climbing nearly 1%.
● The commodities market also saw a rebound. WTI crude oil futures opened higher on Monday, rising over 1% to $59.68/barrel. New York copper futures rose more than 2%.
● The digital currency market saw a strong rebound over the weekend. Bitcoin broke above $115,000, rising 4.25% in the past 24 hours.
● Meanwhile, traditional safe-haven assets diverged. Spot gold erased a $20 opening loss and remained above $4,030/oz, while safe-haven assets like the yen weakened significantly.
02 Trade Tensions: Evolving Rhythm in the U.S.-China Game
This round of tariff escalation did not come without warning. After a preliminary agreement was reached on TikTok in September, the U.S. continued with “small maneuvers.”
On September 29, the U.S. introduced the strictest-ever 50% equity penetration control rule, further strengthening the technology blockade. Subsequently, China escalated export controls on rare earths and key technologies. In response to U.S. threats, the Chinese Ministry of Commerce made it clear: “Threatening with high tariffs is not the right way to interact with China.” The spokesperson emphasized that China “does not want a tariff war, but is not afraid of one either.”
Compared to the trade tensions in April, this round of the game shows different characteristics. Minsheng Securities pointed out that the biggest difference this time is China’s calm and composed response—rather than direct tit-for-tat escalation, China is clarifying the situation and stating its bottom line.
The Trump administration is also “leaving room” in its strategy, setting the tariff effective date for November 1, thus leaving a valuable window for negotiations.
03 Market Mechanism: The "TACO" Strategy Reappears in the Crypto Market
The TACO trading strategy has been popular on Wall Street and in the crypto community since 2025 as an “event-driven” short-term tactic, named after “Trump Always Chickens Out.”The "TACO" trading strategy is once again active in the crypto market. This strategy is based on Trump’s behavioral pattern of “tough pressure followed by compromise,” betting on rebound opportunities after short-term market crashes.
● Core Mechanism: Trump’s tariff threats often serve as bargaining chips before negotiations, ultimately leading to agreements through concessions, creating a “shock-rebound” trading window. For example, after the April tariff escalation, the Trump administration repeatedly delayed implementation or exempted certain goods (such as refined copper), confirming that 100% tariffs lack economic feasibility and are more of a political gesture.
● Applicability in the Crypto Market: The high leverage characteristic of the crypto market amplifies "TACO" opportunities. This week, Trump’s tariff remarks triggered a 16% plunge in bitcoin (from $121,420 to $102,000), but history shows that such events are often followed by rapid rebounds. In March 2025, a tariff announcement caused bitcoin to fall to $97,513, then rebound strongly during “Uptober” and “Moonvember.”
● Current Signals and Market Response: Investors have gradually become immune to the “tariff stick.” On October 13, after an initial drop, bitcoin quickly rebounded 4.25% to above $115,000, with $630 million in crypto liquidations across the network, but panic selling did not persist.
● On-chain data shows whales accelerating their positions during the drop: for example, the “7 Siblings” address borrowed $40 million USDC to bottom-fish ETH, while some institutions increased their holdings in bitcoin ETFs (with $2.7 billion inflow in a single week). This shows that under the "TACO" strategy, short-term declines are seen as buying opportunities.
04 Capital Flows: High-to-Low Rotation and Defensive Positioning in the Crypto Market
Within the crypto market, capital is shifting from high-valuation sectors to lower-valued areas, while defensive assets are gaining favor.
● Leverage Cleansing and Capital Rotation: In the 24 hours after Trump’s tariff announcement, total crypto liquidations reached $18.28 billion, with major coins (such as bitcoin and ethereum) dropping over 10%, while altcoins generally crashed 70%-90%. This prompted funds to move from high-leverage speculative assets to underlying stable assets.
● ETF and Institutional Positioning: Bitcoin ETFs continue to attract capital (with a net inflow of $2.7 billion this week), and capital flows are diverging from small and mid-cap tokens to large-cap coins and compliant products. At the same time, investors prefer assets with “antifragile” characteristics:
● Bitcoin and Gold Correlation: The 30-day correlation between bitcoin and gold has turned positive, with both becoming safe-haven choices; when gold broke through $4,050, bitcoin followed suit.
● Stablecoins and DeFi Platforms: Amid political uncertainty, decentralized finance protocols such as MakerDAO’s DAI have seen a surge in stablecoin trading volume, with some funds using them as a temporary safe haven.
05 Outlook: Key Nodes and Game Balance in the Crypto Market
Short-term volatility and medium- to long-term opportunities coexist in the crypto market, with the core lying in the evolution of the trade game and macro policies.
● Short-term (1-2 weeks): Event-Driven and Sentiment Repair
1. APEC Summit Sets the Tone: The APEC summit from October 31 to November 1 is a key node. If a meeting between U.S. and Chinese leaders eases tensions, the crypto market may rebound quickly; if tariffs take effect on November 1, attention should be paid to the exemption list (such as mining companies related to consumer electronics).
2. Data Delays Amplify Volatility: The U.S. government shutdown has delayed the release of September nonfarm payrolls and CPI data, making the Fed’s policy path unclear (the October meeting may keep rates unchanged). Historically, crypto market volatility tends to spike during economic data vacuums.
● Medium- to Long-term (1-3 months): Policy and Fundamentals Dominate
1. Legislative and Regulatory Breakthroughs: The Senate is pushing forward the Responsible Financial Innovation Act; if passed by year-end, it will pave the way for token securitization and ETF expansion, attracting incremental capital.
2. Supply and Demand Structure Support: Supply side: The bitcoin halving cycle, combined with ETF inflows (up to $2.7 billion in a single day), may exacerbate supply-demand imbalances. Demand side: The U.S. deficit ballooning (reaching $1.97 trillion) undermines dollar credibility, and institutions such as Standard Chartered believe bitcoin is becoming a “new safe-haven tool,” complementing traditional gold.
3. Risks and Balance Points: The “rare earth-soybean” card in the U.S.-China game forms mutual constraints: China’s rare earth controls (accounting for 92% of global refining capacity) may impact the U.S. AI hardware chain, while U.S. soybean stockpiles (prices down 23%) force Trump to compromise. The crypto market should be alert to “black swan” events, such as a tariff war triggering a liquidity crisis and causing a chain reaction of forced liquidations of collateral (cryptocurrencies).
However, institutional consensus holds that trade frictions will not change the long-term trend of the crypto market. After leverage is cleared, the market structure will be healthier, similar to the “cleansing” in March 2020 that kicked off a bull market.
