Trump's one tweet, BTC returns to $80k after 3 months

Original | Odaily Planet Daily (@OdailyChina)

Author | Golem (@web3_golem)

Mad Monday! After 3 months, Bitcoin once again breaks through the $80k mark.

The altcoin market is also recovering. According to Quantify crypto data, in the past 24 hours, over 80% of the tokens among the top 200 by market cap have risen to some extent, with DOGE up over 5.43%, ZEC up over 10.78%, WLFI up over 7.06%.

In derivatives, according to Coinglass data, in the past 12 hours, the entire network experienced liquidations totaling $286 million, mainly short positions, amounting to $251 million, with most liquidations occurring when Bitcoin broke through $80k. Additionally, BTC liquidations reached $152 million, and ETH liquidations totaled $75.5 million.

This round of market movement is not exclusive to the crypto market. On Monday, Asian stock markets also surged significantly, with the MSCI Asia Pacific Index rising 1.9%, erasing declines since the Iran conflict began. Tech stocks rebounded, SK Hynix’s stock soared nearly 10%, TSMC jumped over 6%, and Hong Kong tech stocks also gained across the board, with Xiaomi Group up over 10%, and Alibaba (09988.HK) up over 6%.

Meanwhile, according to Gate data, WTI crude oil and Brent crude oil prices also saw slight declines, with WTI remaining around $101 per barrel.

As both crypto and stock markets rose on Monday, and oil prices fluctuated slightly, investors familiar with this situation might guess that it was again the handiwork of financial market manipulator Trump.

Market expects Trump’s “Freedom Action” to potentially open the Strait of Hormuz

On the evening of May 3, Eastern Time, Trump posted that he would help ships leave the Strait of Hormuz starting Monday (Middle East time). He stated that many countries unrelated to the current Middle East disputes are seeking US assistance to release ships blocked in the Strait of Hormuz; to carry out humanitarian rescue, the US will safely guide their ships out of restricted waters, calling this operation “Project Freedom.”

After Trump’s post, the US Central Command also announced it would provide military support for the rescue operation of ships trapped in the Strait of Hormuz, including missile destroyers, over 100 land-based and sea-based aircraft, multi-domain unmanned platforms, and 15,000 troops, claiming this was to prevent Iranian military attacks on merchant ships passing through the strait.

Such unilateral action by Trump naturally angers Iran. As early as May 2, Ali Nikzad, Vice Speaker of the Iranian Islamic Parliament, emphasized in an interview along the Strait of Hormuz that Iran would not back down from the Strait of Hormuz, and said Parliament has approved a “Hormuz Strait Management Law,” which includes permanently banning Israeli ships from passing through this critical waterway, requiring ships from “hostile countries” to pay “war reparations” to gain passage, and other ships needing Iranian authorization to pass.

Therefore, Iran views Trump’s “Freedom Action” as an infringement on Iran’s management rights over the Strait of Hormuz. Shortly after Trump announced the “Freedom Action,” Iran’s Islamic Parliament’s National Security and Foreign Policy Committee Chairman, Ebrahim Azizi, stated that any US intervention in the new maritime order of the Strait of Hormuz would be regarded as a violation of the ceasefire agreement.

On April 8, the US and Iran signed a two-week temporary ceasefire agreement. When the ceasefire was about to expire on April 21, Trump announced an indefinite extension to continue negotiations with Iran. Although the US and Iran have a ceasefire, control of the Strait of Hormuz has remained in Iran’s hands, and it has not fully reopened for passage.

From the consequences perspective, if Trump enforces the “Freedom Action,” the current situation between the US and Iran could escalate from negotiations back to conflict. Not only would the Strait of Hormuz be blocked from normal passage, but in the long term, war would deal a much greater blow to global financial markets than today’s rally.

Of course, whether the “Freedom Action” will actually be implemented by Trump remains uncertain. It is now the morning of May 4 Middle East time, but there are no reports of US forces successfully escorting ships through the Strait of Hormuz. Could this be another classic T.A.C.O. (Trump Always Chickens Out) trade? (Related reading: Did the war win or lose? Trump: I made money )

This kind of Trump-style “boy who cried wolf” story seems to be familiar to Iran as well. Iranian scholar Seyed Mohammad Marandi previously said at the end of March when Trump posted about manipulating oil prices, “Every week at market opening, Trump makes such statements to suppress oil prices.” Therefore, Ebrahim Azizi also contemptuously stated that no one would believe (Trump’s) “blame-shifting tricks” when he announced the “Freedom Plan.”

Although whether the “Freedom Action” will be actually carried out remains unknown, Trump’s eagerness to restore normal passage through the Strait of Hormuz is obvious, as it involves not only US national interests but also whether Trump can maintain his presidency.

On May 3, according to the latest ABC/Washington Post/Ipsos poll, Trump’s disapproval rate reached 62%, the highest in his two terms, and with midterm elections approaching, such a support rate is quite unfavorable for Trump. Therefore, he desperately needs a performance that can turn the tide. Reopening the Strait of Hormuz is the most ideal goal (although the current problem is also largely of his own making).

On one hand, externally, reopening the Strait of Hormuz is a demonstration of US global deterrence, which Trump can package as a complete victory over Iran, showcasing US strength; on the other hand, internally, restoring passage through Hormuz could lower global oil prices, ease dissatisfaction among US citizens and related stakeholders, and the decrease in prices could also increase the likelihood that newly appointed Federal Reserve Chair Powell will persuade other officials to agree to a rate cut at the June policy meeting, injecting vitality into the market. (_Related reading: Powell’s farewell, but not stepping down, Trump’s rate cut plan may fail)

Early morning on May 4, Trump also posted on Truth Social a photo holding multiple cards, with the caption “I have all the cards.” On the surface, this shows confidence, but often, the less likely someone is to win, the more they like to bluff.