WealthBee Macro Monthly Report: The tariff war accelerates global asset differentiation, and encryption rises as a new balance pivot.

In early April, Trump’s reciprocal tariff policy triggered a big dump in global assets, and Trump subsequently eased his stance by admitting that tariffs “will be significantly reduced” and confirmed that Federal Reserve Chairman Powell will continue to serve, alleviating concerns about turmoil in the Fed’s leadership. After investors were reassured, a new wave of risk appetite emerged, with Bitcoin leading the way in a strong rally.

From the data point of view, although the macroeconomic hard indicators such as consumption and employment in the United States have not yet been substantially impacted in April, the risks have increased significantly: in March, the US non-farm payrolls increased by 151,000 (expected 170,000), and the unemployment rate rose to 4.1%, which was better than expected; But on the other hand, the Trump administration’s “reciprocal tariff” policy implemented in April, the average tax rate soared from 2.4% to 21.4%, resulting in an 18.6% year-on-year increase in the imported goods price index, of which the pre-tariff rush on auto sales drove retail sales to surge by 1.4% month-on-month in March, but the real consumption momentum excluding automobiles increased by only 0.5%, down 0.15 percentage points from February.

This policy-driven short-term consumer overdraft stands in stark contrast to April’s largest decline in consumer sentiment since 1978: the preliminary University of Michigan Consumer Sentiment Index came in at 50.8 in April, well below expectations of 53.5 and 57 in March, marking the fourth consecutive monthly decline. The preliminary 1-year inflation expectations of the University of Michigan surged to 6.7% in April, the highest since November 1981, with expectations of 5.2% and the previous value of 5%; The preliminary 5-year inflation forecast came in at 4.4%, the highest since June 1991, with an expectation of 4.3% and a previous reading of 4.1%. Soft indicators such as expectations have weakened sharply, revealing unsustainability.

The U.S. economy is facing a stagflationary dilemma of “high inflation-low growth-policy conflict”, and the backlash effect of tariff policy will accelerate through the triple channel of supply chain, job market and consumer confidence. The International Monetary Fund (IMF) released the latest World Economic Outlook report, which lowered the global economic growth forecast for 2025 from 3.3% to 2.8%, of which the growth forecast for the United States was halved to 1.8% and the eurozone fell to 0.7%.

Looking at the Fed, the Fed’s PCE inflation rate has been above the 2% target for 14 consecutive months, and short-term inflation expectations jumped to 3.8% in April, the highest since 1982. Fed Chair Jerome Powell said policymakers will continue to monitor the economic situation, especially inflation and growth data, and wait for more clear signals before considering adjusting interest rates.

As the “anchor point” of global monetary policy, the Federal Reserve (FED) is experiencing the most severe policy imbalance test in nearly forty years. According to widespread predictions from external sources, in the most optimistic scenario, if inflation decreases faster than expected, the Federal Reserve (FED) may shift to a neutral interest rate more quickly, potentially starting to cut interest rates in the first half of 2025 (in May or June).

Throughout April, US dollar assets faced dual pressures from policy uncertainty and economic downturn, especially in the first half of the month when market sentiment was extremely pessimistic; first on April 3, the three major US stock indices experienced a historic big dump, with the Dow Jones Industrial Average falling 5.50% in a single day, the Nasdaq index plummeting 5.82%, and the S&P 500 index dropping 5.98%, marking the largest single-day decline since March 2020. Tech stocks were hit hard, with companies like Apple, Tesla, and Nvidia experiencing significant declines due to rising supply chain costs and export restrictions, among which Nike plunged 14.44% in a single day due to high tariffs from Vietnam and Indonesia. Bruce Kasman, the chief economist at JPMorgan, even raised the probability of a US economic recession to 79%, reflecting deep market concerns about the long-term negative impacts of tariff policies.

U.S. stocks experienced a significant rebound at the end of the month. On April 23, the S&P 500 index rose by 9.52% in a single day, while the Nasdaq index increased by 12.16%, marking the second-largest single-day gain in history. This rebound is partly attributed to market expectations for potential adjustments in tariff policies, such as the announcement by U.S. Customs and Border Protection to exempt certain electronic products from tariffs. Additionally, the earnings reports of some tech giants exceeding expectations have also boosted market confidence, such as Google’s AI business growth and a $70 billion stock buyback plan.

Although US stocks recovered most of the tariff losses at the end of the month, the uncertainty of Trump’s policies and the downward trend of the US economy may create a stronger resonance, making US stocks still the first to be affected. Wall Street generally believes that this rebound may only be a “technical correction in a bear market.” Bank of America strategist Michael Hartnett warned that investors should “sell on rallies,” as the market still faces policy uncertainty and recession risks. Goldman Sachs also pointed out that if the tariff policies are not substantially relaxed, US stocks may come under pressure again.

Before the Federal Reserve (FED) resumes interest rate cuts to stimulate the economy and progress is made in tariff negotiations, the short-term rebound in the US stock market is still overshadowed.

Although it was also hit hard by tariffs in April, Bitcoin outperformed market expectations and redefined its position among global assets:

First of all, in mid-to-late April, the price of Bitcoin strongly broke through the $94,000 mark, rising by more than 3% in a single day, hitting a new high for the year. This rally echoes gold’s simultaneous record highs, highlighting its attributes as “digital gold”. And in stark contrast to U.S. stocks, which were hit by tariffs during the same period, Bitcoin’s volatility decreased significantly in April. This stability has attracted medium- and long-term capital to accelerate the entry - from April 21 to 23, the US Bitcoin spot ETF saw a net inflow of more than $900 million for three consecutive days, pushing the total global crypto market capitalization to exceed $3 trillion, rekindling the bullish sentiment of the entire crypto market, and investor confidence once rose to the highest level in more than two months, which the US media called an alternative option seeking a safe haven. In this wave of gains, the collective wealth of long-term holders (LTHs) has increased significantly. According to CryptoQuant data, long-term holders realized a market capitalization increase of $26 billion from $345 billion to $371 billion from April 1 to 23, indicating that long-term holders are rewarded for sticking around.

According to CryptoQuant statistics, Bitcoin experienced a decline of over 30% from January to early April, which aligns with the historical market cycle patterns of 2013, 2017, and 2021, where typically a pullback occurs after reaching new highs, flushing out weaker investors before resuming the upward trend. Additionally, the decoupling of Bitcoin from traditional markets and the demand for non-correlated assets (such as the price of gold rising to a new high of $3500) have strengthened long-term holders’ confidence in Bitcoin as a store of value.

According to Cointelegraph, there are currently 16.7 million BTC in profit across various wallets—this level is often referred to as the “threshold of optimism.” Historically, similar patterns in 2016, 2020, and early 2024 have led to bull markets. When the profitable supply remains above this area, it often boosts investor confidence and triggers sustained price momentum, typically pushing Bitcoin to new all-time highs within a few months. After Bitcoin broke through $90,000, the number of active addresses on the chain surged by 15%, and the number of whale wallets (holding over 1,000 BTC) reached a four-month high, further validating the bullish consensus of capital.

Driven by the surge in Bitcoin prices, the total market capitalization of global cryptocurrencies surpassed 3 trillion USD on April 23, with Bitcoin’s market cap reaching 1.847 trillion USD, surpassing the two global tech giants Alphabet (Google) and Amazon, as well as the precious metal silver, becoming the fifth largest asset after gold (22.344 trillion USD), Apple (3.000 trillion USD), Microsoft (2.726 trillion USD), and Nvidia (2.412 trillion USD).

The recent ranking improvement has made Bitcoin the only digital asset in the top ten global assets list. More notably, the long-term correlation between Bitcoin and U.S. tech stocks (especially the Nasdaq 100 Index) has shown signs of “decoupling.” During April, Bitcoin’s price surged by 15%, while the Nasdaq 100 Index only rose by 4.5% in the same period, highlighting its independent market performance and changes in asset attributes. Compared to the market volatility caused by tariff policies in April, Bitcoin has recently demonstrated stronger price stability and lower volatility, which may encourage more listed companies to consider allocating crypto assets in their financial strategies.

There is no doubt that crypto assets are rewriting the underlying logic of global asset pricing. In April, ARK Invest founder Cathie Wood significantly raised her Bitcoin price target for 2030 from 1.5 million USD to 2.4 million USD, based on increased institutional interest and the growing acceptance of Bitcoin as “digital gold.”

At present, the market rebound in April is a temporary alleviation of concerns about the market crash and economic recession caused by tariffs. The further trend will depend on whether the trade war can be resolved in a timely manner and the trajectory of the U.S. economy. Given that the most optimistic interest rate cuts are not expected until after January, market divergence remains, and short-term volatility is inevitable. Meanwhile, as traditional financial markets face turbulence due to the trade war and economic cycles, the independence and anti-cyclical attributes of crypto assets may attract more funds seeking diversified asset allocation.