From Zuodayoucai to Zuogangyoujin, what kind of transformation is the market going through?

Author: Luke, Mars Finance

In April 2025, global financial markets were upended overnight by Trump's executive order of "reciprocal tariffs". Bitcoin plunged from a high of $88,000 to $82,500, while gold broke through $3,160/ounce, continuing to hit an all-time high. Meanwhile, the US dollar index DXY fell below 102, hitting a new low since October last year, with U.S. stock index futures plummeting, evaporating a $2 trillion market value within 15 minutes. The market uses the most direct price language to express deep anxiety about the escalation of the trade war.

In the past few years, a strategy has been popular in the investment circle called "Zuoda Youcai" - holding a US technology leader like Nvidia in the left hand and Bitcoin in the right hand, chasing high-risk and high-return growth. But now, investors have turned to "left Hong Kong and right gold" -buying Hong Kong stocks with the left hand, seeking opportunities for low valuation and high growth potential; holding gold with the right hand is the first choice for safe-haven assets. What exactly happened behind this transition from high risk to low risk, from a single market to diversified allocation? Let’s start with Trump’s tariff policy and tell it in a dash.

1. Trump's "reciprocal tariffs": a "grass-style" performance

On the evening of April 2, Trump signed two executive orders on "reciprocal tariffs" at the White House, announcing the establishment of a 10% "minimum benchmark tariff" on 50 countries and regions around the world, and imposed additional tariffs on about 60 countries with the largest trade imbalance, with a tax rate of up to half of the other party's import tariffs on the United States. This means that the effective tariff rate in the United States may soar from 2.4% in 2024 to 25.1%, exceeding the level after the implementation of the Smut-Holly Tariff Act in 1930. White House officials swore that this will "revitalize American industry" and return high-end industries such as shipbuilding, aircraft, and chips to the United States.

However, when we carefully study the calculation methods of these tariffs, we find a "grass team" farce. The formula used by the Trump administration is: MAX (10%, (import - export)/import). Translated, it means dividing the trade deficit by the import amount, obtaining a ratio, and then taking the maximum value between this ratio and 10% as the basis for tariffs imposed on other countries. Taking China as an example, the table shows that China imposes a 67% tariff on the United States, and the United States' "reciprocal tariff" is set at 34%, which is exactly half of the other party's. This calculation method is so simple that it makes people doubt its seriousness - a Excel table can be pulled out and can be handled in 10 minutes, and it is also called "reciprocal tariffs".

What’s even more funny is that Trump seems to know that this plan is too tough and deliberately left a "negotiation window" for a week. The benchmark tariff will come into effect on April 5, and the additional reciprocal tariff will come into effect on April 9, during which countries can negotiate with the United States to reduce tariffs. US Treasury Secretary Bescent even publicly shouted: "I suggest that all countries do not take revenge, everyone can negotiate!" This reminds people of bargaining in the vegetable market: first shout the price high, and then wait for the other party to bargain. Such a policy-making method is not like a game between a big country, it is clearly a "grass-style team" performance.

But the consequences of this performance are not funny at all. CICC estimates that if these tariffs are fully implemented, US PCE inflation may rise by 1.9 percentage points, and the actual GDP growth rate will fall by 1.3 percentage points, falling into the risk of "stagflation". Economists at Morgan Stanley warned that Asian countries are most vulnerable to tariff shocks, and policy uncertainty will suppress corporate confidence and thus affect capital expenditure and trade. The market's uneasiness spread rapidly, Bitcoin surged and fell, and gold became a safe haven for funds.

2. Bitcoin and Gold: A Roller Coaster and Haven

On the night Trump's tariff policy was announced, the crypto market experienced a double-killing battle for long and short. As soon as the news came out, Bitcoin once rushed to $88,000, setting a new high since March 25, up more than 5%; but after the announcement of additional peer tariffs, Bitcoin gave up its gains, falling below $82,500. In contrast, spot gold broke through $3,160 per ounce in a short period of time, continuing to hit an all-time high. The performance of the two is in sharp contrast: Bitcoin has no risk aversion attributes, while gold has become the "stationary needle" in the market turmoil.

It is no secret that Bitcoin’s high volatility is long gone. Data from Blockforce Capital shows that on March 24, Bitcoin's 30-day annualized volatility climbed to 71.28%, a record high of nearly a year, while the indicator was only 30.98% on February 23. This roller coaster-like fluctuation reflects the core attributes of Bitcoin: it is highly dependent on global liquidity and is correlated with liquidity up to 83%. Bitcoin can soar when market sentiment is optimistic and capital is abundant; but once liquidity tightens or uncertainty intensifies, it often bears the brunt. Trump's tariff policy undoubtedly intensifies market concerns about liquidity, and Bitcoin's diving is reasonable.

However, we cannot be completely bearish on Bitcoin. BitMEX co-founder Arthur Hayes said in a tweet today that if Bitcoin can hold the $76,500 support level before the US tax day, April 15, "we will be out of danger." He also reminded investors to "don't be cut off by the volatile market." From a technical perspective, Bitcoin has a large amount of selling pressure around $86,000-87,000, but the pin to $88,500 last night has consumed some of the selling pressure, laying the groundwork for the next wave of rise. The Bitcoin relay point may be between $93,000-97,000, with the ultimate goal being $100,000-105,000. It can be seen that despite the sharp short-term volatility, Bitcoin still has room for growth.

Gold shows a completely different logic. The World Gold Council proposed that gold yields can be approximated by one formula: gold yields = 3 × global nominal GDP growth rate - 1 × global other investment market growth rate. This formula explains the past 92% of gold's price changes through backtesting, showing that its core driving force lies in economic fundamentals and capital game. Against the current context of the intensified risk of "stagflation", gold's anti-inflation and safe-haven properties are fully activated. Gold rose 27.2% in USD in 2024, and continued to break through $3,160/ounce since the beginning of 2025, far exceeding Bitcoin.

3. The Fed's "waiting and watching" and the market's chain reaction

Trump's tariff policy not only impacted the crypto and gold markets, but also put the Fed in a dilemma. On April 3, Fed Director Adriana Coogler said it is appropriate to maintain current interest rate levels before the risk of upward inflation subsides. She pointed out that the recent cooling process of inflation has stagnated, and long-term consumer inflation expectations have climbed to a 32-year high, and policy changes may further push up inflation expectations. Although the impact of one-time tariffs on inflation is theoretically short-lived, its impact may be more lasting if it affects multiple areas.

The Fed's "waiting and watching" attitude directly affects market liquidity. On April 3, the US dollar index DXY fell 102, a day-to-day drop of 1.67%, a new low since October last year; the yields of the 10-year and 2-year Treasury futures fell 10 basis points to 4.06% and 3.798%, respectively. The weakening of the dollar and the decline in Treasury yields reflect market concerns about the economic slowdown and also supports the rise in gold.

At the same time, policy uncertainty has exacerbated market volatility. Some traders analyzed that the market is currently deciding the "worst situation", and the sharp drop in US stock index futures and Bitcoin surge and fallback are all manifestations of this process. But he also believes that uncertainty before April 5 may be the peak in the near future, and market confidence is expected to recover if countries make progress in negotiations with the United States. Some views also warn that if China adopts retaliatory tariffs, a large-scale trade war may break out, causing a double blow to inflation and the economy.

4. From "Zudayoucai" to "Zuangyoujin": Transformation of investment

strategies

The popularity of the "Zuodayoucai" strategy is inseparable from the market environment from 2020 to 2021. It was a period of extremely high risk appetite: the Fed's low interest rate policy drove the US stock market, with Nvidia's stock price soaring from around $100 in 2020 to more than $300 in 2021 (after the stock split adjustment); Bitcoin exceeded $60,000 in 2021. However, the vulnerability of this high-risk strategy is exposed in 2022. The Fed's interest rate hike, the global economic slowdown, and geopolitical risks have caused both the U.S. stock and cryptocurrency markets to plummet.

In 2025, Trump's tariff policy further exacerbated market uncertainty, and investors began to turn to the "left, Hong Kong, right, gold" strategy:

• Left-hand Hong Kong stocks: The Hong Kong stock market has a low valuation (the Hang Seng Index's price-to-earnings ratio is below 10 times for a long time), and it benefits from China's economic recovery and policy support. At the beginning of 2025, the Chinese government introduced a series of measures to stimulate the economy, and Hong Kong stocks became a popular choice for capital inflows.
• Right-handed gold: As a traditional safe-haven asset, gold is favored against the background of the intensified risk of "stagflation". In 2025, concerns over the global economic slowdown and geopolitical tensions pushed gold prices to exceed $3,160 per ounce.

From "left to right cake" to "left to right gold", it is essentially the result of investors' shift from chasing high growth to seeking security and diversification. Traders predict that if tariffs are implemented at current figures, Bitcoin’s high this week may be $88,500, and liquidity in the U.S. tax season will remain tight next week, with a rebound high of $90,000-91,000. Gold may continue to benefit from safe-haven demand and maintain its upward momentum.

5. Market Outlook for 2025: Opportunities in Uncertainty

Trump's "reciprocal tariff" policy has pushed the global trade system into a new round of game and has also set off a chain reaction in the financial market. In the short term, policy uncertainty may continue to suppress market confidence, and high-risk assets such as Bitcoin will face liquidity pressure. But from a technical perspective, Bitcoin still has room for growth. If it can maintain the support level of US$76,500, it may hit the US$100,000 mark in the future. Gold has an advantage under the risk of "stagflation" and is expected to continue to hit a new high in 2025.

For investors, more attention is needed to pay attention to the game between major categories of assets in 2025. The combination of Hong Kong stocks and gold may be a wise choice to deal with uncertainty. As the old saying goes, "In any market environment, there is always an asset that is a bull market." Let's wait and see how the market will perform in 2025.