April will be a pivotal moment in global trade policy. US President Donald Trump has dubbed April 2nd as 'Liberation Day', referring to when new tariffs on imports from over 25 countries will take effect.
Impact on Financial Markets
Markets reacted negatively over the past week with the S&P 500 dropping 3.5% and the Nasdaq 100 decreasing 5%. Gold, on the other hand, surged by 4%, reaching a record high above $3,150 per ounce. The yield on the 10-year Treasury fell to 4.2%, despite an increase in some core inflation components.
Gold and Bonds: Safe Assets
In periods of macroeconomic and geopolitical instability, investors typically seek yield-bearing and historically stable assets like gold and bonds. According to Bloomberg data, gold funds have attracted over $12 billion in net inflows over the past two months, marking the largest surge since 2020.
Bitcoin's Role in Uncertainty
The likelihood of Bitcoin becoming a reserve asset is increasing. Companies are increasingly using Bitcoin and its ETFs to diversify their balance sheets. According to BitcoinTreasuries, publicly traded companies hold 665,618 BTC, and private firms hold 424,130 BTC.
The introduction of new US tariffs could significantly impact the global economy. Assets like gold and Bitcoin continue to play a crucial role in providing stability amid uncertainty.
