Global Markets Brace for Uncertainty Despite Temporary Relief

U.S. markets closed mixed on Thursday (April 17), with the Dow Jones dropping 1.33%, the S&P 500 inching up 0.13%, and the Nasdaq slightly down by 0.13%. Futures suggested continued weakness for the Dow while tech-related indices showed mild optimism. Gold prices remained elevated at $3,328/oz, and oil hovered around $64.68/barrel, showing investor caution amid ongoing global tensions.

Bitcoin continued to consolidate near $84,600. Major altcoins saw little movement. The overall crypto market capitalization remained stable at $2.756 trillion. U.S.-based Bitcoin spot ETFs experienced $106.9 million in inflows, primarily from BlackRock’s IBIT and Fidelity’s FBTC. ETH ETFs reported no significant activity.

Notably, Bitcoin has maintained higher price levels since Trump’s re-election, even as major U.S. indices lag. This divergence highlights growing confidence in crypto assets amid market volatility.

Fed Under Pressure: Trump Wants a New Chair

President Trump has renewed criticism of Jerome Powell, Chairman of the Federal Reserve, for failing to reduce interest rates during a period of increasing economic instability. While the President lacks authority to dismiss Powell outright, he can appoint a successor once Powell’s term expires in May 2026. Trump made it clear that if re-elected, he will seek a Fed leader who aligns with his economic priorities, particularly those supporting lower interest rates.

Trump’s frustrations stem from the Fed's reluctance to ease monetary policy in support of his aggressive tariff strategy. Trump argues that if the Fed had acted sooner with rate cuts or bond purchases, he may not have needed to implement the 90-day tariff delay recently announced. The potential replacement of Powell underscores Trump's desire for greater synergy between fiscal and monetary policy.

However, Fed officials, including Powell, have emphasized a data-dependent approach, resisting political pressure and prioritizing long-term inflation and employment targets. Even some of Powell’s usual critics, like Senator Elizabeth Warren, have defended the Fed’s independence as essential to sound economic governance.

Tariff Escalation with China and a Glimpse of Optimism

The U.S.–China tariff standoff continues to dominate headlines. New U.S. sanctions now include a permanent ban on Nvidia’s H20 chips from being sold to China, potentially costing the company $5.5 billion in Q2 revenue. In retaliation, China is considering expanding the trade war into the services sector — including tourism, consulting, legal, and financial services — areas where the U.S. maintains a trade surplus.

The Trump administration also introduced new docking fees for Chinese-built ships at U.S. ports. Under President Biden, a probe had already begun into China's dominance in shipbuilding, where they control 75–80% of the global fleet. Proposed fees could reach $1.5 million per ship, signaling bipartisan support for reshoring this industry.

In an interview, Trump remained confident that a deal with China is not only possible but “likely.” He indicated that private negotiations are underway and a “very good deal” could be announced soon. This sentiment has fueled hope in financial markets that an end to the trade war might be in sight.

Historical Parallels and Potential Path Forward

Despite heightened tensions, economists point to similar trade disputes in history — notably with Japan in the 1980s — that eventually led to lasting cooperation. With the U.S. and China deeply intertwined economically, many believe a mutually beneficial agreement is inevitable. The key variable now is timing.

The longer tariffs persist, the broader the damage to global supply chains, businesses, and consumers. Should the conflict escalate, both the Federal Reserve and the People’s Bank of China may be forced to implement more aggressive interventions to stabilize their respective economies.

Bitcoin as a Strategic Reserve: A Growing Debate

Anthony Pompliano, CEO of Professional Management, believes that Bitcoin could mirror gold's performance but with amplified gains. Over the past year, both assets have gained approximately 35%. Historically, Bitcoin tends to lag gold by 100–150 days before initiating its own upward trajectory.

Pompliano emphasized that institutional interest in Bitcoin has grown, largely driven by the advent of spot ETFs. However, he argued that self-custody remains crucial for strategic geopolitical value. Sources within the Trump campaign suggest discussions are underway to establish a national Bitcoin reserve, potentially funded through revaluation of gold reserves or redirected tariff revenue.

Bo Hines, Trump’s digital asset campaign advisor, highlighted that the U.S. once held 400,000 BTC, half of which was sold prematurely. At today’s value, the remaining Bitcoin would be worth over $17 billion. This serves as a stark reminder of crypto’s growing influence in sovereign fiscal strategies.

EU, Japan, and Global Reactions

In Europe, Italy’s Prime Minister Giorgia Meloni will meet President Trump in Washington, becoming the first EU leader to do so since his new tariff policy announcement. Europe is under pressure to negotiate favorable trade terms as new tariffs loom over industrial and luxury exports.

Meanwhile, the SEC has scheduled a crypto custody roundtable for April 25, 2025, featuring Kraken, Fidelity, and regulatory experts. The session will address best practices for safeguarding digital assets as part of the "Spring Sprint Toward Crypto Clarity" initiative.

Gas fees on Ethereum have dropped to $0.17 — the lowest since 2020 — due to reduced smart contract activity. The upcoming “Pectra” upgrade on May 7 promises to double Layer-2 throughput, allow fee payments in stablecoins, and raise staking limits, potentially reigniting ETH demand.

Panama City has approved Bitcoin, ETH, USDC, and USDT as valid payments for taxes, public transit, and fines. The government will not hold crypto directly; instead, partner banks will convert it to USD for treasury deposits.

Regulatory Watch and Market Moves

VanEck is preparing to launch a new ETF tied to digital asset-related equities under ticker NODE. The move aims to broaden exposure to the crypto economy via traditional financial markets.

Galaxy Investment CEO Mike Novogratz noted that investor caution remains high amid economic uncertainty, making it harder for Bitcoin to attract fresh capital. He cited two prevailing narratives — Bitcoin as a macro hedge like gold and as a maturing technological asset — both of which require time and market stability to gain widespread adoption.

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The geopolitical chess match between Trump, Powell, and China continues to shape the macroeconomic landscape. While a U.S.–China agreement remains elusive, optimism lingers that economic necessity will drive diplomacy. Meanwhile, the growing institutionalization of Bitcoin — both in policy discussions and portfolio allocations — signals a profound shift in how nations prepare for a new era of financial strategy.

Disclaimer:
This article is for informational purposes only and does not constitute investment advice. Always conduct your own research before making any financial decisions.

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