QCP: Tariff Escalation Exacerbates Crypto Market Volatility, Further Stock Market Decline May Lead to Bitcoin Breaking Below $75,000 Support

On April 9th, QCP released its daily market observation indicating that the market continued to decline overnight following the implementation of a new round of tariffs by the United States on China. Volatility remained at a high level, with the VIX remaining above 40 for three consecutive days. Even traditional safe-haven assets failed to fulfill their intended functions. Safe-haven assets were unable to provide effective hedging as both gold prices and US bonds witnessed sell-offs due to investors' efforts to reduce risk and meet margin calls. The Trump administration showed signs of pressure with a lower-level refinancing strategy for US debt, causing the entire yield curve to surge. The 10-year US Treasury bond yield reached a peak of 4.50%, while the 30-year yield briefly exceeded 5%. Credit spreads continued to widen, reflecting a general deterioration in risk sentiment. Instead of changing course, President Trump seemed to be adopting a Martingale strategy, doubling down with each retaliatory action. The market is now placing its hopes on two possibilities: Trump's market support measures or the Fed's market support measures for reinforcement. However, both seem unlikely to materialize immediately. With the unemployment rate remaining stable and signs of inflation recovery, the Fed may maintain the current interest rates in the foreseeable future. This is in contrast to the market's pricing, as the market anticipates four rate cuts in 2025, including speculation about intermeeting rate cuts. Bitcoin traded sideways around the $75,000 level. However, if the stock market experiences another significant decline, this level may break down. Ethereum continued to underperform and dropped to $1,400, which is its lowest level since early 2023. With increased volatility, cryptocurrency yield strategies have once again come into focus. Rising implied volatility provides an attractive opportunity to earn returns through structured trades.