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

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Original | Odaily Planet Daily (@OdailyChina)

Author | Golem (@web3_golem)

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

The altcoin market has also recovered. 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 varying degrees, with DOGE up over 5.43%, ZEC up over 10.78%, WLFI up over 7.06%.

In derivatives, according to Coinglass data, over the past 12 hours, the entire network experienced liquidations of $286 million, mainly short positions, totaling $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 war. Tech stocks rebounded, SK Hynix’s stock soared nearly 10%, TSMC jumped over 6%, and Hong Kong tech stocks also rose collectively, with Xiaomi Group up over 10%, and Alibaba (09988.HK) up over 6%.

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

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

Market expects Trump’s “free 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 implement humanitarian rescue, the US will safely guide their ships out of the 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 move was to prevent Iranian military attacks on merchant ships passing through the strait.

Such unilateral actions by Trump naturally anger Iran. As early as May 2, Ali Nikzad, Vice Speaker of the Iranian Islamic Parliament, emphasized in an interview along the coast of the Strait of Hormuz that Iran would not back down from the Strait of Hormuz, and said the parliament had 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 “free action” as an infringement of Iran’s management rights over the Strait of Hormuz. Shortly after Trump announced the “free 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 considered a violation of the ceasefire agreement.

On April 8, the US and Iran signed a two-week temporary ceasefire agreement. When the temporary ceasefire was about to expire on April 21, Trump announced an indefinite extension to continue negotiations with Iran. Although the US and Iran had a ceasefire, control of the Strait of Hormuz remained in Iran’s hands during this period, and it was never fully open for passage.

From the consequences, if Trump enforces the “free action,” the current situation between the US and Iran could escalate from negotiations back to conflict. At that point, not only would the Strait of Hormuz be blocked, but in the long run, the impact of war on global financial markets would be much greater than today’s rally.

Of course, whether the bluster king Trump will actually implement the “free action” plan 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 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 “free plan.”

Whether the “free action” will be actually executed remains unknown for now, but 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 success rate of new Federal Reserve Chair Powell convincing other officials to agree to a rate cut at the June meeting, injecting vitality into the market. (Related reading: Powell’s farewell without stepping down, Trump’s rate cut plan may fail)

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