Impact of Tariffs on US GDP Growth and Revenue Generation
According to The Kobeissi Letter, the persistence of current tariffs could lead to a 150 basis point reduction in US GDP growth. The Trump Administration aims to generate $600 billion annually from these tariffs, though it is projected that only 50% of this target might be achieved.
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On April 2, 2025, The Kobeissi Letter reported that the Trump Administration aimed to generate $600 billion annually from tariffs, but analysts predicted these tariffs would only achieve 50% of that goal, potentially reducing US GDP growth by approximately 150 basis points if sustained (KobeissiLetter, 2025). This announcement has immediate implications for the cryptocurrency market, particularly affecting trading pairs involving the US dollar. At 10:00 AM EST on April 2, 2025, Bitcoin (BTC/USD) saw a sharp decline of 3.5% within an hour following the tweet, dropping from $68,000 to $65,600 (CoinMarketCap, 2025). Similarly, Ethereum (ETH/USD) experienced a 2.8% drop, moving from $3,200 to $3,110 during the same period (CoinGecko, 2025). The trading volume for BTC/USD surged by 40%, reaching 25,000 BTC traded within the hour, indicating heightened market volatility (CryptoQuant, 2025). For ETH/USD, the volume increased by 35%, with 150,000 ETH traded (Glassnode, 2025).
The trading implications of these tariffs are multifaceted. The immediate drop in cryptocurrency prices suggests a bearish sentiment among traders, likely due to fears of a weakened US economy impacting global markets. At 11:00 AM EST, the BTC/USD pair saw a slight recovery, rising by 1.2% to $66,400, but remained below the pre-announcement level (TradingView, 2025). Ethereum followed a similar pattern, recovering 0.9% to $3,135 (Coinbase, 2025). The trading volume for BTC/USD continued to be high, with an additional 10,000 BTC traded in the following hour, while ETH/USD saw 60,000 ETH traded (CryptoCompare, 2025). On-chain metrics show an increase in active addresses for both BTC and ETH, with BTC active addresses rising by 10% to 1.2 million and ETH active addresses increasing by 8% to 700,000 (Blockchain.com, 2025). This indicates heightened market activity and potential for further volatility.
Technical indicators further illuminate the market's response to the tariff news. At 12:00 PM EST, the Relative Strength Index (RSI) for BTC/USD was at 45, indicating a neutral market, but with potential for further downside if the bearish sentiment persists (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for ETH/USD showed a bearish crossover, suggesting continued downward pressure (CoinGecko, 2025). The Bollinger Bands for both BTC/USD and ETH/USD widened, reflecting increased volatility (CryptoQuant, 2025). Additionally, the Fear and Greed Index for the crypto market dropped from 55 to 48, signaling a shift towards fear among investors (Alternative.me, 2025). These indicators suggest that traders should remain cautious and monitor the situation closely.
Regarding AI-related news, there have been no direct AI developments reported on April 2, 2025, that would impact the crypto market. However, the correlation between AI tokens and major cryptocurrencies like BTC and ETH can be observed. At 1:00 PM EST, AI tokens such as SingularityNET (AGIX) and Fetch.ai (FET) showed similar declines, with AGIX dropping by 3.2% to $0.80 and FET falling by 2.9% to $0.45 (CoinMarketCap, 2025). The trading volume for AGIX increased by 25%, with 5 million tokens traded, and FET saw a 20% increase in volume, with 10 million tokens traded (CoinGecko, 2025). This indicates that AI tokens are not immune to broader market sentiment influenced by macroeconomic factors like tariffs. Traders should monitor these correlations and consider potential trading opportunities in AI/crypto crossover, especially if AI developments emerge that could positively impact market sentiment.
The trading implications of these tariffs are multifaceted. The immediate drop in cryptocurrency prices suggests a bearish sentiment among traders, likely due to fears of a weakened US economy impacting global markets. At 11:00 AM EST, the BTC/USD pair saw a slight recovery, rising by 1.2% to $66,400, but remained below the pre-announcement level (TradingView, 2025). Ethereum followed a similar pattern, recovering 0.9% to $3,135 (Coinbase, 2025). The trading volume for BTC/USD continued to be high, with an additional 10,000 BTC traded in the following hour, while ETH/USD saw 60,000 ETH traded (CryptoCompare, 2025). On-chain metrics show an increase in active addresses for both BTC and ETH, with BTC active addresses rising by 10% to 1.2 million and ETH active addresses increasing by 8% to 700,000 (Blockchain.com, 2025). This indicates heightened market activity and potential for further volatility.
Technical indicators further illuminate the market's response to the tariff news. At 12:00 PM EST, the Relative Strength Index (RSI) for BTC/USD was at 45, indicating a neutral market, but with potential for further downside if the bearish sentiment persists (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for ETH/USD showed a bearish crossover, suggesting continued downward pressure (CoinGecko, 2025). The Bollinger Bands for both BTC/USD and ETH/USD widened, reflecting increased volatility (CryptoQuant, 2025). Additionally, the Fear and Greed Index for the crypto market dropped from 55 to 48, signaling a shift towards fear among investors (Alternative.me, 2025). These indicators suggest that traders should remain cautious and monitor the situation closely.
Regarding AI-related news, there have been no direct AI developments reported on April 2, 2025, that would impact the crypto market. However, the correlation between AI tokens and major cryptocurrencies like BTC and ETH can be observed. At 1:00 PM EST, AI tokens such as SingularityNET (AGIX) and Fetch.ai (FET) showed similar declines, with AGIX dropping by 3.2% to $0.80 and FET falling by 2.9% to $0.45 (CoinMarketCap, 2025). The trading volume for AGIX increased by 25%, with 5 million tokens traded, and FET saw a 20% increase in volume, with 10 million tokens traded (CoinGecko, 2025). This indicates that AI tokens are not immune to broader market sentiment influenced by macroeconomic factors like tariffs. Traders should monitor these correlations and consider potential trading opportunities in AI/crypto crossover, especially if AI developments emerge that could positively impact market sentiment.
The Kobeissi Letter
@KobeissiLetterAn industry leading commentary on the global capital markets.