What Happened?
The tariff policy of the Trump administration in the United States has triggered a significant decline in global stock markets, causing a sharp downturn in the U.S. stock market. The Taiwan stock market, after the holiday, opened with a historically record-breaking collapse. The overall cryptocurrency market was also affected and experienced a downturn, but Bitcoin demonstrated relative resilience in the early stages of the traditional market decline, leading some traders to believe it may become a safe-haven asset.
Taiwan Stock Market Opens with a Plunge, Setting Historic Lows
The Trump administration recently announced a doubling of its global trade tariff strategy, creating enormous waves in global financial markets and prompting a significant stock market decline. Some analysts have even compared this situation to the “Black Monday” of 1987. Starting from April 5, the Trump administration imposed tariffs ranging from 10% to 49% on all countries. Following this announcement, global stock markets fell sharply, with the U.S. stock market being hit the hardest. The S&P 500 index and the Nasdaq Composite index both fell nearly 6% on the trading day of April 4.
Financial commentators noted that this drop exceeds the losses experienced during the worst week of the 2008 financial crisis. CNBC host Jim Cramer warned that the possibility of a repeat of the 1987 stock market crash cannot be ruled out. The Taiwan stock market, which opened after the Qingming holiday, was not spared from this global stock market crash. Due to the equivalent tariffs imposed by the U.S. igniting a global stock disaster, the Taiwan stock market, upon opening today (the 7th), experienced panic selling pressure, with the weighted index plunging 2086 points after opening, a decline of over 9.7%, marking the largest intraday drop in points and percentage, hitting a low of 19212.02 points. The futures market also hit its limit down immediately after opening, with over a thousand stocks locked in limit down.
Major weighted stocks such as TSMC, Hon Hai, and MediaTek all gapped down directly to their limit down. TSMC’s stock price fell by 94 NTD, marking the largest drop point in history, resulting in a market capitalization loss of 2.43 trillion NTD. Analysts pointed out that due to TSMC’s significant weighting in the Taiwan stock market, the drastic fluctuations in its stock price have had a huge impact on the overall index.
Was the Cryptocurrency Market Also Affected?
The global economy is overshadowed by the U.S. trade tariff shadow, leading to severe declines in traditional stock markets, and the cryptocurrency market was not spared from this shock. Following the significant drop in U.S. stock index futures, the prices of major cryptocurrencies such as Bitcoin and Ethereum also fell. According to data from Cointelegraph Markets Pro and TradingView, Bitcoin (BTC) fell below the 80,000 USD mark on that day, dropping over 6% within 24 hours, while Ethereum’s decline exceeded 12%.
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The total market value of the cryptocurrency market also fell by over 8%. However, prices subsequently showed some rebound. The cryptocurrency fear and greed index also indicated a shift in market sentiment towards “extreme fear.” In stark contrast to the grim scene of traditional stock markets, Bitcoin displayed surprising resilience, with its decline being relatively small compared to the severe fluctuations of the stock market. Some traders believe that Bitcoin has demonstrated its potential as a safe-haven asset.
Notable Bitcoin supporter Max Keiser boldly predicted that if the stock market experiences a collapse similar to that of 1987, Bitcoin could soar to 220,000 USD this month.
Jim’s loss is Bitcoin’s gain.
A 1987 style mega crash will push Bitcoin to $220,000 this month as trillions in wealth seek the ultimate safe haven: Bitcoin.
Another trader, Daan Crypto Trades, pointed out that Bitcoin’s volatility is decreasing, while the stock market’s volatility index (VIX) is at its highest level since the COVID-19 pandemic erupted in 2020, signaling that the cryptocurrency market may experience significant volatility.
“I am very confident that there will also be significant volatility in the cryptocurrency market next week. Whether it is an increase or decrease depends on whether the stock market can hit bottom this week.”
Another trader, Cas Abbe, believes that Bitcoin’s recent drop to a low of 76,000 USD may just be a false breakdown, and a price rebound to 92,000 USD can be anticipated.
References: cointelegraph, cointelegraph, Central News Agency