Global markets are bracing for turbulence as President Donald Trump’s 100% tariff plan on Chinese imports approaches its November 1 activation date. Despite earlier speculation of a retreat, Trump recently told reporters, “I think we’re going to be fine with China,” suggesting confidence rather than concession.
The reassurance was followed by an unprecedented market decline triggered by his tariff rhetoric. Last week, Bitcoin lost nearly 16% in 24 hours, and over $19 billion in leveraged crypto positions were liquidated as traders scrambled to de-risk.
Related: Crypto Markets Bleed as Trump Escalates Tariff War With China
The cascade reflected not only macro fear but also renewed sensitivity to the “Trump factor,” a phenomenon that has repeatedly jolted risk assets since his return to office.
Understanding “TACO”: The Meme Behind the Market
Across trading desks and social media, a familiar phrase has re-emerged: TACO, short for “Trump Always Chickens Out”. The term began as trader slang during Trump’s first presidency, referencing his pattern of aggressive tariff threats followed by sudden reversals once markets reacted negatively.
- In 2025, that narrative has resurfaced with force. Investors are again betting that Trump will retreat before November 1, echoing the same dance seen during the 2019 U.S.–China trade tensions.
- Financial commentators have noted how the “TACO trade,” buying risk assets in anticipation of Trump’s backpedal, has almost become a market strategy in itself.
- But this time, the stakes are higher. Global supply chains are more fragile, inflation remains elevated, and digital assets are far more integrated into macro trading portfolios than they were five years ago.
Why the Tariff Threat Shook the Crypto Market
1. Leverage Amplified the Damage
- The October sell-off exposed how over-leveraged crypto markets have become. A small percentage move in Bitcoin prices forced mass liquidations across exchanges.
- According to data from CoinGlass, more than 1.6 million positions were closed in less than two days, wiping out traders who had used excessive margin during the recent rally.
2. A Broader Flight from Risk
Beyond crypto, the tariff announcement sparked a global shift from risk assets to safe havens.
- Equities sold off, Treasury yields spiked, and the dollar strengthened, all of which reinforced downward pressure on Bitcoin, which still trades like a high-beta risk asset.
3. Confidence Versus Credibility
- Trump’s assurance that “we’re going to be fine with China” temporarily steadied futures markets, but credibility remains the real issue.
- Analysts warn that unless the administration clarifies its trade strategy, markets could continue oscillating between relief rallies and panic sell-offs.
Market Psychology: When Politics Moves Price Action
Crypto traders often interpret geopolitical uncertainty through meme-driven sentiment. “TACO” now serves as both humor and a hedge. This reminds market participants that policy unpredictability itself can drive volatility.
- Peter Schiff cautioned that markets are leaning too heavily on the expectation that Trump will back down.
- Schiff said, “It’s not the best negotiation strategy to let your opponent know that you’re bluffing,” as the Vice President stated the tariff threat was “just a negotiating tactic.”
- Alleging an insider trading partner, Schiff said, ‘It’s good to be friends with the king.”
- Others have echoed similar sentiment, noting that China now knows the U.S. playbook, reinforcing that they hold the stronger hand in the short term.
The tension between these views defines today’s macro-crypto link. Tariff risk has become a real-time test of how digital assets respond to political uncertainty.
What Happens If Trump Holds the Line?
Should the 100% tariffs take effect on November 1, analysts warn of a more profound shock across both traditional and digital markets.
- Exchange Stability Risks: Derivatives platforms could face another wave of forced liquidations, particularly in perpetual futures markets.
- Liquidity Crunch: Stablecoin outflows from Asia-based exchanges may accelerate if Chinese liquidity tightens or capital controls intensify.
- Investor Flight: Funds positioned for a TACO-style reversal might unwind rapidly, amplifying volatility and draining liquidity from spot markets.
Conversely, if Trump delays or modifies the tariff rollout, the relief could spark a sharp short-covering rally. Traders would frame it as another victory for “TACO logic,” proof that political theater remains a tradeable pattern.
What Investors Should Watch Before November 1
- Official Announcements: Any White House clarification or policy adjustment could trigger an instant market pivot.
- Futures Open Interest: Rising leverage in anticipation of relief rallies may signal renewed liquidation risk.
- Stablecoin Flows: Large outflows to cold wallets or Asian exchanges often precede high volatility.
- China’s Response: Any retaliatory move on tech exports or rare-earth materials could reignite market fear.
- Macroeconomic Data: Inflation prints or labor reports may influence Trump’s political calculus ahead of the deadline.
Coin Edition: Lessons from the “TACO Cycle”
- The TACO cycle illustrates how deeply political narratives now shape digital-asset behavior. Each escalation fuels fear, each reversal invites speculation, and both sides reward volatility traders more than long-term investors.
- For institutions, this means factoring political unpredictability into portfolio risk models. For retail traders, it means understanding that memes like TACO may reflect real macro patterns, but timing them remains perilous.
Related: Trump Tariffs Spark $19 Billion Crypto Liquidations in 24 Hours
The Nov. 1 tariff deadline is more than just a trade event; it’s a test for global markets and the crypto world. Whether Trump’s “confidence” means calm or overconfidence will decide if crypto faces more forced sell-offs or a quick bounce back.
As one veteran trader said on X: “TACO isn’t just a joke anymore, it’s a serious strategy with a deadline.”
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
