The ongoing tariff battle between the U.S. and Europe has intensified, causing market uncertainty and stock market declines. However, Bitcoin and the crypto market remain relatively unaffected, signaling its growing role as a hedge against macroeconomic turmoil.

Market Overview

On Thursday, March 27, U.S. stock markets continued to decline across all three major indices: Dow Jones, S&P 500, and Nasdaq. Meanwhile, gold surged to a new high of $3,069 per ounce, while oil rose slightly to around $69.9 per barrel.

The U.S. labor market remains stable, with jobless claims reaching 224,000, nearly matching the forecast of 225,000. Meanwhile, continuing claims fell to 1.856 million, lower than the expected 1.890 million, signaling a resilient job market.

The final Q4 U.S. GDP growth estimate came in at 2.4%, exceeding expectations of 2.3%, confirming that the U.S. economy remains strong despite global uncertainties.

Bitcoin traded around $87,000 earlier in the day before pulling back to $85,000, reflecting a minor correction. Altcoins followed suit, leading to a slight dip in total crypto market capitalization, now at $2.86 trillion.

Despite market turbulence, U.S. Bitcoin spot ETFs recorded another day of positive inflows, with $89 million entering BTC-focused funds. However, Ethereum spot ETFs continued to see outflows, totaling $4.2 million.

U.S.-Europe Tariff Conflict Escalates

President Donald Trump announced a 25% tariff on all foreign-manufactured cars, set to take effect on April 2. The White House maintains a hard stance but remains open to adjustments to ease the impact of reciprocal trade measures.

EU Response to U.S. Auto Tariffs

European leaders reacted strongly to the new tariff policy:

• EU officials expressed regret over the decision and vowed to protect European workers and businesses.
• Pierre Wunsch, a European Central Bank (ECB) board member, warned that Trump’s trade policies could complicate ECB’s interest rate strategies.
• Germany and France declared they would take countermeasures to protect their auto industries.
• French President Emmanuel Macron directly told Trump that the tariffs were a bad idea.
• Luxury automaker Ferrari announced a 10% price increase to offset the tariff impact, but mass-market brands like Porsche and Mercedes-Benz expect a combined $3.4 billion revenue loss due to the new tariffs.

As tariffs disrupt European auto exports, companies are accelerating investments in U.S. manufacturing plants to circumvent trade barriers.

Tesla, often seen as a beneficiary of Trump's policies, is not entirely shielded from the impact. CEO Elon Musk acknowledged that Tesla still relies on imported components, making the company partially affected by the tariff hike. Following the announcement, Tesla shares rose over 1%, bucking the broader auto sector trend.

Trump dismissed claims that he favors Tesla, stating:
"Elon never asked me for any favors, especially not regarding tariffs."
He also emphasized that U.S.-made cars will enjoy tax advantages, as buyers can deduct car loan interest from taxable income, making domestic vehicles more attractive.

‍Global Liquidity on the Rise

Despite concerns over tariffs, inflation, and potential recession, global liquidity is increasing.
M2 money supply (which includes cash and equivalents) has surged globally, indicating central banks are injecting liquidity into markets.

This rise in global liquidity benefits assets like Bitcoin and gold, reinforcing the narrative of crypto as a hedge against fiat currency devaluation.

At the same time, U.S. national debt continues to rise, even as Washington attempts to cut government spending.

Younger Generations Are Investing Earlier

According to the 2024 Global Retail Investor Outlook by the World Economic Forum, Gen Z is leading a paradigm shift in investing behaviors.

• 30% of Gen Z started investing in college or early adulthood, compared to:
  • 15% of Millennials
  • 9% of Gen X
  • 6% of Baby Boomers
• 86% of Gen Z actively research personal investing, nearly double the rate of Baby Boomers (47%).
• 74% of Gen Z and 62% of Millennials own crypto, treating it as a core portfolio asset.

Gen Z also embraces AI-driven investment strategies, with 41% willing to let AI manage their portfolios, compared to only 14% of Baby Boomers.

British author Douglas Adams once observed that:

• Technology existing before we are born feels “natural.”
• Technology invented between ages 15-35 feels revolutionary.
• Technology emerging after age 35 is often viewed skeptically.

This theory aligns with crypto adoption, as younger generations see digital assets as a natural part of the financial landscape. While older generations remain skeptical, crypto’s rise appears inevitable.

U.S. Crypto Policy & SEC Developments

The U.S. Senate recently passed the CRA Act, overturning IRS regulations that required DeFi platforms to collect user KYC data. The bill is now awaiting President Trump’s signature, which he is expected to approve.

Lawmakers continue to push for clearer crypto regulations:

• Representatives Tom Emmer and Darren Soto reintroduced the Securities Clarity Act, aiming to define digital assets more clearly.
• President Trump endorsed Senator Cynthia Lummis' re-election bid, praising her leadership in crypto and financial policy.

However, anti-crypto sentiment remains active in Congress.

• Senator Elizabeth Warren accused Trump of using stablecoins to enrich himself.
• She continues to oppose pro-crypto legislation, despite losing influence after the 2024 elections.

The battle between crypto-friendly lawmakers and anti-crypto factions continues.

Paul Atkins Confirmed as SEC Chairman

Paul Atkins, President Trump’s pick for SEC Chairman, faced Senate confirmation hearings today.

Atkins has long advocated for clear, innovation-friendly crypto regulations and stated:"I have seen how regulatory uncertainty stifles market growth and innovation."
"My priority will be to establish a transparent, consistent regulatory framework for digital assets."

Despite opposition from Senator Elizabeth Warren, who raised concerns about his ties to financial firms, Atkins is expected to be confirmed due to his strong legal background and previous SEC experience.

If confirmed, his leadership could further reshape U.S. crypto policy.

Additional Market Updates

• GameStop's stock price dropped 22% following its Bitcoin bond issuance announcement, as investors worried about dilution and financial instability.
• Over 400 South Korean officials disclosed a combined $9.8 million in crypto holdings, averaging $24,000 per person.
• BlackRock Global Allocation Fund increased its IBIT Bitcoin ETF holdings by 117%, now holding 430,770 shares valued at $17.13 million.
• Ripple partnered with Chipper Cash to enhance cross-border payments in Africa, leveraging Ripple Payments for faster, cheaper transactions.