Editor's Note: This article analyzes the recent changes in U.S. global tariff policies and their impact on financial markets, particularly Bitcoin's unique performance; discusses the long-term economic effects of tariffs, especially asset allocation choices during stagflation, and the performance of Bitcoin and gold in such an environment; examines the impact of current trade tensions on the U.S. dollar and potential Bitcoin adoption, and finally provides an outlook on the economic prospects for the coming years, suggesting that Bitcoin and scarce commodities like gold may receive more attention and demand in a high-inflation environment. Since the U.S. announced new global tariff policies on April 2nd, global asset prices plummeted, only gradually recovering after Trump's announcement of a tariff policy suspension (excluding China). However, the initial tariff announcement affected almost all assets, and during this period, Bitcoin's decline was relatively small when measured by risk-adjusted benchmarks. If Bitcoin's correlation with stock market returns were 1:1, the S&P 500's decline should have meant a 36% drop in Bitcoin price. In reality, Bitcoin only dropped by 10%, highlighting the significant diversification benefits of holding Bitcoin as part of an investment portfolio. In the short term, the global market outlook may depend on trade negotiations between the White House and other countries. While negotiations may lead to lower tariffs, setbacks could trigger more retaliatory actions, and the actual volatility of traditional markets remains high and difficult to predict. Investors should cautiously adjust their positions in this high-risk market environment. Moreover, Bitcoin's volatility increase is far lower than that of stocks, and multiple indicators show relatively low speculative trading positions in the cryptocurrency market. If macro risks ease in the coming weeks, cryptocurrency market capitalization is expected to rebound. Regarding Bitcoin, although its price has declined over the past week, from a longer-term perspective, the impact of higher tariffs on Bitcoin will depend on their effect on the economy and international capital flows. Tariffs (and changes in related non-tariff trade barriers) may lead to "stagflation" and potentially cause structural weakness in U.S. dollar demand. Therefore, increased tariffs and changes in global trade patterns could be positive factors for Bitcoin adoption in the medium to long term. [The rest of the translation follows the same professional and accurate approach, maintaining the original structure and meaning while translating into clear, fluent English.]

The moment most similar to President Trump's "Liberation Day" declaration in U.S. history might be the "Nixon Shock" on August 15, 1971. That evening, President Nixon announced a comprehensive 10% tariff and ended the system of converting dollars to gold - a system that had supported the global trade and financial system since the end of World War II. This action triggered diplomatic activities between the United States and other countries, ultimately reaching the Smithsonian Agreement in December 1971, where other countries agreed to revalue their currencies relative to the dollar. The dollar ultimately depreciated by 27% between the second quarter of 1971 and the third quarter of 1978. In the past 50 years, there have been several instances of trade tensions followed by a weakening dollar (partially negotiated).

Recent trade tensions are expected to again lead to continued dollar weakness. According to relevant indicators, the U.S. dollar is already overvalued, the Federal Reserve has room to lower interest rates, and the White House wants to reduce the U.S. trade deficit. Although tariffs will change effective import and export prices, dollar depreciation may gradually rebalance trade flows through market mechanisms, thereby achieving the expected effect.

Child of the Era - Bit

The sudden changes in U.S. trade policy are causing adjustments in financial markets, which will have short-term negative economic impacts. However, the market conditions of the past week are unlikely to be the norm for the next four years. The Trump administration is implementing a series of policy measures that will have different impacts on GDP growth, inflation, and trade deficits. For example, while tariffs may reduce economic growth and increase inflation (causing stagflation), certain types of deregulation may increase growth and reduce inflation (reducing stagflation), with the final result depending on the extent to which the White House implements its policy agenda in these areas.

Despite the uncertain prospects, the best guess is that U.S. government policies will lead to continued dollar weakness and overall inflation above the target within the next 1 to 3 years. Tariffs themselves may slow growth, but this impact may be partially offset by tax cuts, deregulation, and dollar depreciation. If the White House also actively pursues other growth-promoting policies, GDP growth may remain relatively good despite the initial tariff shock. Regardless of actual growth, history shows that sustained inflationary pressures over a period may be favorable for scarce commodities like Bit and gold.

Moreover, like gold in the 1970s, Bit now has a rapidly improving market structure - supported by changes in U.S. government policies. This year, the White House has implemented a series of broad policy changes that should support investment in the digital asset industry, including withdrawing a series of lawsuits, ensuring asset applicability to traditional commercial banks, and allowing regulated institutions (such as custodians) to provide cryptocurrency services. This, in turn, has triggered a wave of mergers and acquisitions and other strategic investments. New tariffs are a short-term negative factor for the valuation of digital assets like Bit, but the Trump administration's cryptocurrency-specific policies have consistently supported the industry. Overall, the increased macro-economic demand for scarce commodity assets and the improved investor operating environment may be a powerful combination for widespread Bit adoption in the coming years.

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