The Impact of President Donald Trump's Reciprocal Tariffs Are Starting to Be Felt

By Francisco Rodrigues (All times ET unless indicated otherwise) The impact of President Donald Trump's reciprocal tariffs is starting to be felt.

The impact of President Donald Trump’s reciprocal tariffs is starting to be felt.

The U.S. economy contracted for the first time in three years last quarter and stock prices have seen their worst first 100-day performance of a presidential administration since 1974.

Also, markets cooled in the first three months of the year, even as it beat analyst forecasts for both revenue and earnings per share, new figures from trading platform Robinhood showed on Wednesday.

It wasn’t alone, major tech companies including Microsoft and Meta (META.UL) beat estimates and, crucially, Robinhood’s revenue from crypto more than doubled from the year-earlier quarter. That may foreshadow what to look for later today, when Block (SQ.N), Riot Platforms (RIOT.O), Strategy (STRAT.O) and Reddit post results.

“The recent wave of weak macroeconomic data has pointed to both recessionary risks and rising inflation,” James Butterfill, the head of research at CoinShares, told CoinDesk. “Despite this, bitcoin (BTC) has shown remarkable resilience, outperforming the Nasdaq by 11% since ‘Liberation Day’ on April 2.”

Indeed, while first-quarter gross domestic product (GDP) fell 0.3% and major stock indexes post posted losses in last month, bitcoin (BTC) held strong. The largest cryptocurrency rose nearly 15% against the dollar in April as investors started using it as a safe haven, along with gold and the Swiss franc.

To Butterfill, risk assets are now seemingly benefiting from expectations of an earlier-than-expected interest-rate cut.

“Equities and bitcoin appear to have recoupled, both rebounding today on renewed hopes of an imminent interest-rate cut. A disappointing payroll figure on Friday – which we see as likely – could be the final nail in the coffin for Powell, paving the way for more dovish policy from the Fed.”

Yet in the cryptocurrency space, there’s more to keep an eye on. Ethereum’s long-awaited Pectra upgrade, which includes improvements to make the network more user-friendly and efficient, is going live on mainnet on May 7.

The upgrade is significant for Ethereum, which has been losing ground to more efficient blockchains including Solana (SOL), Base and BNB Chain (BNB). DeFiLlama data shows total value locked (TVL) on Ethereum’s smart contracts grew just 4% in April, compared with 21% on Solana, and 9.9% on BNB Chain. Base saw a minor contraction.

In the past year, Artemis data shows Ethereum net outflows totaled $3.3 billion, while Base and Solana saw $3.3 billion and $3.2 billion in net inflows, respectively. Still, Ethereum recorded $880 million in net inflows in April, suggesting the trend is reversing ahead of Pectra’s activation.

The trend has, however, taken its toll. The ETH/BTC ratio has dropped to little over 0.19, the lowest level in five years. Stay alert!

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