Crypto Surge And Uncertainty Over Tariffs Stir Global Markets

Global markets face a tumultuous day as developments in the cryptocurrency and trade sectors spark significant volatility.

A surge in cryptocurrency prices has lifted market sentiment following an announcement from former President Donald Trump on social media. Trump proposed that a reserve of digital assets would include popular cryptocurrencies such as Bitcoin (BTC-USD), Ethereum (ETH-USD), XRP, Solana, and Cardano. Bitcoin rose by approximately 10%, while Ethereum spiked 13% before slightly retreating. However, questions remain about the structure of the reserve and how it will be funded. This uncertainty is expected to be addressed at the White House Crypto Summit on Friday. Analysts are concerned about the logistics of the reserve, particularly in light of the U.S. government’s $36 trillion debt. Some speculate that crypto seized during criminal investigations could be used to back the reserve, but this would merely transfer assets without generating new demand.

Meanwhile, U.S. trade policy remains a critical issue as President Trump considers moving forward with his controversial tariffs. Trump’s administration is expected to impose a 25% tariff on imports from Mexico and Canada on Tuesday, alongside an additional 10% tariff on Chinese goods. U.S. Commerce Secretary Lutnick confirmed the tariffs would take effect on Tuesday, but the final decision on the 25% tariff remains uncertain. Trump could potentially ease the burden if Mexico and Canada agree to implement their own tariffs on Chinese imports or delay the tariffs until April 1, when a study on trade will be completed.

The tariff threat looms large against the backdrop of recent U.S. economic data, which has underperformed expectations. The Atlanta Fed’s GDPNow tracker now forecasts a contraction of 1.5% in Q1, down from a previous estimate of +2.3%. Tariffs, which act as a tax on consumers, are seen as a potential drag on U.S. consumption, especially as the economy shows signs of slowing. Notably, the U.S. trade deficit surged to a record high in January, driven by increased imports—a trend exacerbated by the tariff announcement. Analysts suggest that non-monetary gold imports may have skewed the data, mitigating the potential impact on GDP.

As markets brace for another potential economic shock, all eyes are on the release of U.S. employment data on Friday. The report, coupled with a speech from Federal Reserve Chair Jerome Powell, is expected to play a pivotal role in determining future market sentiment. Investors have already priced in a series of Fed rate cuts, with 73 basis points expected by January 2026, a significant shift from earlier forecasts.

In China, the government’s response to any U.S. trade actions remains uncertain. The National People’s Congress, set to convene on Wednesday, is expected to announce a new stimulus package worth between 2 trillion yuan and 3 trillion yuan ($274 billion–$412 billion), and may consider retaliatory measures against U.S. tariffs.

As these high-stakes issues unfold, markets will continue to navigate a mix of rising digital asset prices, uncertain trade policies, and a weakening U.S. economy.