Jessy, Jinse Finance
The Spring Festival market did not arrive as expected.
On February 1, local time in the United States, US President Trump signed an executive order to impose a 25% tariff on imports from Canada and Mexico and a 10% tariff on imports from China starting on February 4.
Since the US stock market was closed over the weekend, the impact of this policy was not reflected in the stock market, but the release of risk aversion sentiment was all reflected in the Altcoin market. The market, which had a rare rebound on the evening of February 1, fell on February 2. As of the time of writing, BTC has fallen below $10,000, ETH has fallen below $3,100, and the Altcoin market has also ushered in a new round of declines, with most Altcoins even falling to their recent lows, such as Trump, which was the focus in late January, has fallen to the 10s. Gold has hit a new high, breaking through $2,800 per ounce. This also fully demonstrates the high risk aversion sentiment in the current financial market.
Not only has the Spring Festival market disappeared, but there are also a large number of negative views on whether there will still be a February market. After Trump's formal inauguration, the market has not been able to find a clear direction, and now the executive order on Altcoins signed by Trump has not brought sustained emotional excitement to the market, but rather seems to be a kind of landing of good news. Trump's release of a MEME token before taking office has also largely consumed the industry's confidence. And policies like raising tariffs undoubtedly increase macroeconomic risks, making investors worry about rising inflation and seek safe havens.
At present, we are in a stage of ambiguous macroeconomic conditions before the Fed's interest rate cut. Under such circumstances, the market will continue to fluctuate.
Has the Trump trade become invalid, and has macroeconomics become the biggest factor affecting the Altcoin market?
Originally, investors were relatively optimistic about the market rally in February, mainly due to their optimistic expectations for the implementation of a series of Altcoin-related policies by Trump after taking office.
Indeed, after Trump took office, he did fulfill most of the promises he had made to the Altcoin industry, such as signing an executive order to establish a Altcoin working group and banning central bank digital currencies. However, the "using Bitcoin as national reserves", which has the greatest impact on the Altcoin industry, has not yet been implemented. As a result, it did not have a great boosting effect on the market.
And before Trump took office, he issued his namesake MEME token, harvesting a wave of "leeks", and his token almost drained the market's liquidity in the short term, and the more adverse impact is that it is a behavior that consumes the industry's confidence.
It is precisely because of all the above reasons that Trump's inauguration did not have a great boosting effect on market confidence.
But bad news keeps coming. First, Deepseek negatively impacted US tech stocks, which also negatively impacted the crypto market. And the US's move to raise tariffs on Mexico, Canada, and China will most likely cause the US economy to slow down, and the imposition of tariffs may also disrupt the progress the US government has made in curbing inflation, triggering or exacerbating inflation, and the rise in inflation will further transmit to monetary policy, leading to further tightening of monetary policy.
From the perspective of global trade, Trump's tariff hikes have escalated global trade frictions, which may lead to a slowdown in global economic growth, and the International Monetary Fund has also stated that in the event of severe decoupling and large-scale tariffs, it may ultimately lead to a decline in global GDP. The slowdown in global economic development will definitely affect the overall liquidity in the market, and the total investment amount and trading activity in the market will also decline. As a high-risk investment, the Altcoin market will also decline.
Macroeconomic uncertainty has become the Sword of Damocles hanging over the Altcoin market, and it is precisely because of this that some news that excites the market can only boost the market in the short term, and for capital to continue to flow in, we still need to look at the Fed's interest rate cut situation and the real implementation of Bitcoin as national reserves.
And when the market is falling, it seems that all news becomes bad news. For example, on February 2, there was news that El Salvador had recently passed reforms to the "Bitcoin Law" to officially cancel Bitcoin's status as legal tender.
This news caused Bitcoin to fall sharply in the short term. This also shows that the current market has reached a point of panic, and market sentiment is extremely panicked, but it also indicates that a short-term rebound will appear.
The Altcoin season may disappear, and the biggest macroeconomic risk may have landed, with the market fluctuating mainly in the future
In such a complex macroeconomic situation, the industry may have to accept a fact, that is, the Altcoin season may disappear.
Currently, it has become too easy to issue new tokens, a large number of new tokens are emerging in the market, there are many on-chain projects, and the supply of Altcoins has increased significantly, but the total market capital is limited, leading to insufficient demand, and it is difficult for individual Altcoins to get enough capital support to drive price increases.
Faced with such a complex overall situation of Altcoins, investors cannot be obsessed with them, but should invest their funds in the hot track projects, and sell when they make money.
This situation undoubtedly amplifies the casino-like aspect of the Altcoin industry, and it is becoming increasingly difficult to make money on Altcoins. The recent sharp declines in Altcoins driven by Bitcoin's declines are undoubtedly constantly proving this cruel but necessary fact that everyone must accept.
In the future, perhaps only the few tokens that have passed the ETF spot will be long-term focused by the market and able to attract long-term capital inflows. In the case of limited market capital, how to choose coins is as important as how to choose stocks in the stock market. The past market-wide bull market will not reappear. The advantages of mainstream Altcoins like BTC and ETH will become more and more obvious, as they attract most of the capital and market attention.
Trump's tough tariff policy is actually a tool for him to negotiate with his trade partners, using tariffs to force relevant countries to compromise on some issues, which is a game, and if both sides reach a compromise in the end, it will also boost market sentiment.
What will have a longer-term impact on the Altcoin market is the Fed's interest rate cut situation. Currently, major institutions expect the Fed to cut interest rates again in June 2025. This also means that before June, the market will not have a big reaction to the interest rate cut policy being better or worse than expected.
In summary, the main macroeconomic risk unfavorable to the crypto market in the next few months is the tariff issue, and the tariff issue has actually been basically implemented, and what follows is a game of tariffs between countries.
Before June, there should not be too much macroeconomic bad news, but there will also not be a long-lasting bull market, and the market will still fluctuate mainly.
For investors, if you cannot profit from the volatile market, it is best to avoid the risks brought by the volatility as soon as possible.
