From issuing tough threats to backing down at the last minute, Trump’s “TACO strategy” is stirring up waves across global financial markets, with the crypto market bearing the brunt.
“I spoke with Indian Prime Minister Modi, and he said he would not continue buying Russian oil.” On October 20, Trump made this claim to reporters aboard Air Force One, adding that if India did not comply, “they would have to continue paying huge tariffs.”
However, India’s Ministry of External Affairs immediately denied that any such conversation had recently taken place between the two leaders. The data also contradicted Trump—preliminary figures from global trade analytics firm Kpler showed that in the first half of October, India’s imports of Russian oil actually increased, averaging about 1.8 million barrels per day, up by around 250,000 barrels compared to September.
This diplomatic Rashomon is a classic example of the “TACO” strategy: short for “Trump Always Chickens Out,” a term coined by Financial Times columnist Robert Armstrong.
01 Trading Pattern: Decoding the TACO Strategy
TACO, or “Trump Always Chickens Out,” is a term created by Financial Times columnist Robert Armstrong.
It accurately summarizes Trump’s negotiation style: initially making extreme demands on issues like tariffs to create pressure, but ultimately backing down to reach an agreement. After repeated cycles, this pattern has formed a predictable transmission path in the market.
The Four Stages of TACO Trading | Typical Impact on the Crypto Market |
Issuing Extreme Threats | Triggers panic selling in the market, with bitcoin and other crypto assets plunging sharply |
Panic Selling in the Market | Massive liquidations of high-leverage contracts, market liquidity nearly dries up |
Backing Down | Signals of easing are released, previous threats are denied or downplayed |
Retaliatory Rebound | The crypto market rebounds sharply, often outpacing traditional assets |
On October 11, Trump threatened to impose tariffs on China, bitcoin immediately crashed by 15%, ethereum plummeted by over 20%, and many altcoins fell by more than 70%.
Less than two days later, his stance softened, and Vice President Vance echoed this, noting that the development of China-US trade largely depended on China’s response—if China remained rational, the US would also be a rational negotiator.
02 Market Impact: Investors Evolving from Panic to Immunity
As the TACO playbook is repeatedly enacted, market reactions are evolving from panic to rationality.
● In recent events, the market’s response has been noticeably calmer. Where sharp declines used to create immediate buying opportunities, now there is more choppy digestion, indicating that investors are becoming immune to Trump’s “tariff bombs.”
● More notably, the market has shifted from passive response to proactive anticipation. Before the easing news is announced, bitcoin prices have already risen in advance, so when the positive news actually lands, the upward momentum is weakened.
This “front-running” behavior shows that traders are learning how to seek short-term opportunities in these predictable swings.
03 The India Incident: A New Geopolitical Test
Trump’s TACO strategy is not only reflected in trade with China, but is also applied to other areas of international relations.
● On October 20, he revealed that India had promised to stop buying Russian oil, but the Indian side later stated that in the energy sector, they would prioritize the interests of Indian consumers.
● New Delhi neither confirmed nor denied any policy shift regarding the purchase of Russian oil.
● This incident once again demonstrates another form of TACO trading—using extreme positions to gain bargaining chips, then quietly backing down when faced with real difficulties.
04 The New Normal for Crypto Markets: The Main Battlefield of Macro Games
The repeated enactment of the “TACO” strategy is profoundly reshaping the crypto market ecosystem.
● Due to their high liquidity and 24/7 trading, crypto assets are often the first sector to react to Trump’s remarks. Every Trump speech not only stirs up stocks, forex, and bonds, but also becomes a trigger point for bitcoin and ethereum sentiment.
● During the market bloodbath on October 11, according to data, in just 24 hours, total liquidations across the network reached $19.3 billions, with over 1.67 million investors liquidated, and the global crypto market capitalization evaporated by more than $500 billions.
● The most direct impact of this strategy is a comprehensive upgrade in the dimensions of market games. Value analysis based on project fundamentals or on-chain data remains important, but above that, a high-frequency macro battlefield dominated by “tweets” and “headlines” is quietly taking shape.
05 Outlook: Seeking Certainty Amid Uncertainty
● Looking ahead, as long as this political game of creating crises to gain bargaining chips continues, “TACO trading” will not disappear.
● Traders will focus more on seeking short-term opportunities in these predictable swings, thus shaping even sharper “V-shaped reversals.”
Recent major cases of Trump’s TACO trades and market reactions show the evolution of this strategy.
Date | Trump’s Action | Market Reaction | Final Result |
October 11, 2025 | Threatened to impose 100% tariffs on Chinese goods | Bitcoin flash crashed 15%, total network liquidations $19.3 billions | Stance softened two days later, market rebounded sharply |
October 13, 2025 | Stated “wants to help China, not hurt” | Bitcoin rebounded above $115,000 | Total crypto market cap returned to $4 trillions |
October 20, 2025 | Claimed India would stop buying Russian oil | Crude oil prices remained under pressure | India stated it would prioritize its own energy interests |
06 Investment Strategy: Surviving Amid Political Noise
Faced with such a volatile market, investors need new survival rules.
● The primary principle is to respect leverage and control risk. “TACO” markets are a “meat grinder” for high-leverage contract traders—any high-leverage position can be wiped out instantly in news-driven extreme moves.
● Secondly, investors should pay attention to cross-market signals, especially the performance of US stock futures and gold. The sentiment shifts in these traditional assets often provide early warnings for crypto market trends.
● Most importantly, investors need to rise above the noise and return to common sense. Rather than obsessing over predicting the next reversal, it is better to take a long-term view and focus on the long-term value of projects.
