A new round of reciprocal tariff war: Why is the world accelerating its embrace of cryptocurrency?

On May 12, the China-US Geneva Economic and Trade Talks exceeded expectations, with US stocks and cryptocurrencies rising under policy benefits and market expectations. However, the ruling by the US International Trade Court at the end of the month weakened the "legal basis" of the tariff war, triggering policy negotiations, and global trade rule reconstruction entered the "judicial-administrative confrontation" stage, with long-term tariff impact still a concern. The decentralized and cross-sovereign nature of crypto assets, resistant to policy intervention, is increasingly favored by investors. The US government tasted sweet economic data in May: the latest April non-farm employment data grew by 177,000, better than expected, indicating a still robust labor market. The China-US Geneva Economic and Trade Talks reached a "tariff suspension" agreement, alleviating market concerns about global supply chain disruption. Consumer inflation expectations for imported goods (such as electronics and daily necessities) decreased, promoting retail consumption willingness. The Conference Board's data released on the 27th showed that the US consumer confidence index unexpectedly soared to 98 in May, a significant rebound of 12.3 points from April's 85.7, marking the largest monthly increase in four years, demonstrating the positive transmission of tariff easing to the consumer side. However, "good fortune does not come in pairs," and the bitterness of US debt is already at hand. After the "Trump 2.0" era began, massive fluctuations in the US debt market became commonplace. In late May, the 30-year US debt yield soared to over 5.1%, close to its highest level in 20 years. While factors like Japanese debt and trade negotiation progress exist, everyone knows that the US fiscal outlook is the most critical, and a new variable has emerged: at the end of May, Trump's government's "One Big Beautiful Bill Act" passed the House of Representatives, proposing to raise the US debt ceiling from the current $10 billion to $40 billion. The New York Times cited predictions that the bill would push the US debt-to-GDP ratio from the current approximately 98% to 125%, and the bill is currently awaiting Senate review. Additionally, the Federal Reserve's interest rate cut remains unclear. The May meeting minutes published on May 28, 2025, showed that almost all 19 officials participating in the Fed policy meeting believe that "inflation may be more persistent than expected," therefore maintaining a pause on interest rate cuts. Overall, the current US economy is in a "stable but risky" stage: short-term growth resilience supports the market and benefits the US dollar, but broader fiscal and monetary policy backgrounds may suppress its upward space. Subsequently, how the Senate revises the "One Big Beautiful Bill Act" (such as tax reduction scale and spending cut intensity) and other circumstances during the signing process will impact the US economic structure and global financial markets. Whether the contradiction of "stimulating short-term growth while overdrawing long-term credit" can be alleviated remains a mystery. Wall Street has the saying "Sell in May," but the tariff easing in early April broke this spell. US stocks and crypto markets quickly cleared the negative pricing of the "reciprocal tariff war" at a speed and magnitude beyond expectations. The S&P 500 rose about 6.15% for the month, Nasdaq about 9.56%, and Dow Jones about 3.94%, with S&P 500 and Nasdaq achieving their strongest May performances since 1990 and 1997 respectively, directly reflecting market optimism about supply chain restoration and corporate profit improvement. The May 12 interim agreement between China and the US directly boosted market risk appetite. That day, US stock indices surged across the board, with the Dow rising 1,160 points (2.81%), S&P 500 up 3.26%, and Nasdaq 4%, creating the largest single-day increase since 2024. Tech giants were the biggest beneficiaries, with Amazon (AMZN) and Meta (META) rising over 7% and NVIDIA and Apple over 6%. Goldman Sachs and other institutions raised US stock expectations after tariff easing, setting the S&P 500's 12-month target at 6,500 points, emphasizing increased "soft landing" possibilities. However, another perspective argues that rising US debt yields might squeeze corporate profit margins, especially for tech companies dependent on low-interest environments. This long-short game leads to market characteristics of "high volatility and high differentiation." More controversial is the Trump administration's "One Big Beautiful Bill Act". The bill involves multiple domains like taxation and immigration, potentially pushing the US debt-to-GDP ratio from the current approximately 98% to 125%, far exceeding international warning lines (typically considering 90% as the debt risk threshold), intensifying market concerns about US debt credit risk. Moody's also downgraded the US sovereign credit rating from Aaa to Aa1 this month.

The bill claims to "cover debt increments through tax reform," providing short-term expectations for economic "soft landing," but the market generally questions the fiscal sustainability of the United States - in the first 5 months of fiscal year 2025, the US federal fiscal deficit reached $1.147 trillion, expanding 38% year-on-year, with tax revenue growth facing challenges, and the debt "snowball" effect may be difficult to contain. Musk openly stated in a CBS interview that he was "disappointed by the bill's increase in deficit," while the Democratic Party accused him of "undermining government efficiency." Potential revisions during the subsequent Senate review (such as reduced tax scale) and the uncertainty of presidential signing will become potential core factors suppressing market risk appetite.

In short, the market's core focus hasshifted fromliquidity and rate cuts toUS Treasury bonds, with"Trump risk"always online.

As a digital asset bellwether, Bitafter breaking through $100,000 in April, staged a significant reversal in May - rising from the initial $95,000 range to $105,000 by month-end, a 12% monthly increase, reaching $112,000 at one point and refreshing the high since April 2024, significantly overturning the market's inherent perception of it as a "high-volatility risk asset". Under the new phase of the tariff war, this resonance with US stocks (Nasdaq index rose 9.56% during the same period) means investors are re-anchoring assets amid policy uncertainty..

In such a market atmosphere, Bit's fundamentals have also ushered in key catalysts, with a particularly significant "siphon effect" in capital: According to Bloomberg-compiled data, over the past five weeks,US Bit ETFs have attractedover$9 billion in capital inflows, while gold funds experienced over $2.8 billion in capital outflows, indicating that some investors are abandoning traditional gold and turning to Bit, dubbed "digital gold," as a new value storage and hedging tool, with a significant shift in investment trends.

Among them,BlackRock's internal investment portfolio BlackRock Strategic Income Opportunities Portfolio continues to increase its Bit ETF (IBIT) holdings.Currently,IBIT's assets under management exceed $72 billion, and despite being launched last year, it has already ranked among the top 25 global Bit ETFs. From a more macro perspective,IBIT's rapid development reflects the accelerating integration of crypto into the mainstream financial system.On the 19th, Morgan Stanley began allowing clients to invest in Bit, although itsCEO Jamie Dimonremains skeptical."We will allow clients to purchase Bit," Dimon stated at Monday's annual bank investor day, "We will not provide custody services, but will reflect related transactions in client statements." This decision is a significant move for the largest US bank and marks Bit's further integration into mainstream investment, potentially prompting institutions like Goldman Sachs to follow suit.

The current US crypto regulatory relaxation alsobrings positive new conditions.On May 12th,the US Securities and Exchange Commission(SEC)new chairmanPaul S. Atkinsdelivered a keynote speech at the crypto task force tokenization roundtable, proposing the US goal of building the "global crypto capital" and announcing that the SEC will transform its regulatory approach from "enforcement-led" to "rule-guided". More specifically, the SEC is considering three key reforms - clarifying security token identification standards, updating custody rules to allow self-custody under specific conditions, and establishing conditional exemption mechanisms for new products, meaning providing a clearer legal framework for crypto market participants, reducing uncertainty, and promoting innovation.

Beyond direct funding and regulatory push, breakthroughs in the stablecoin domain are injecting new momentum into Bit's pricing logic.On May 19th, the US Senate passed theGuiding and Establishing National Innovation for Stablecoins Act(abbreviated as the GENIUS Act)with a procedural vote of 66-32, marking the imminent arrival of the first federal stablecoin regulatory framework in the US, which will reshape the US crypto asset market and impact the global financial system. Just two days later, the Hong Kong Legislative Council passed theStablecoin Regulation Drafton May 21st, expected to take effect this year, demonstrating Hong Kong's breakthrough in stablecoin regulation. The two acts create a synergistic effect, jointly promoting global stablecoin market standardization, opening new funding channels for the digital currency market and providing institutional support for Web3 ecosystem development. With the entry of "traditional financial institutions + regulatory systems," the narrative of real-world asset (RWA) tokenization is accelerating, and the market consensus on Bit as a "value storage base" will be further strengthened, highlighting its unique position in global asset allocation.

What is equally promising for the future is that the volatility of traditional financial markets will not unilaterally suppress cryptocurrencies, but instead become a boost for their rise at specific stages: In the short term, the rise of U.S. Treasury yields has triggered market concerns about the U.S. fiscal situation, prompting safe-haven funds to flow into the crypto market; from a long-term perspective, the deterioration of the U.S. fiscal situation may enhance the safe-haven attractiveness of crypto assets, and this fiscal pressure could weaken confidence in the U.S. dollar and government bonds, prompting investors to turn to decentralized assets like Bit to hedge credit risks.

The crypto frenzy in May means that when the traditional financial system is struggling amid tariff friction, debt crisis, and monetary policy dilemmas, Bit is becoming a capital hedge for the "uncertainty of the old order". With regulatory relaxation moving from expectation to implementation, this reconstruction process may accelerate. Of course, medium-term suppression of U.S. Treasury yields and policy fluctuations may test this rally. However, the "digital gold" narrative of Bit has entered the mainstream topic framework.