🎯 Tariff War: USA vs. China, what it means for Crypto?

Hello dear subscribers! Today we’ll be talking about Mantra going down!

In today’s bulletin, we are covering:

• Surfing the Market, with the AI Index and SOL
• Don’t miss the News about Microstrategy and Mantra’s Crash
• MilkyWay is under the spotlight.
• A short article about the Tariff War: USA vs. China

Focusing on the AI Index today, which broke the local downtrend resistance and recovered the key $50 support range. Consolidation here would be bullish mid-term:

Amazingly bullish structure for SOL here. Breaching up the main downtrend and recovering the key $125 range:

MicroStrategy Signals More BTC Buys as Bitcoin’s Store-of-Value Role Strengthens

MicroStrategy plans to resume Bitcoin purchases, despite recent market volatility. With over $8.6 billion in unrealized gains, the company reinforces Bitcoin’s growing narrative as a store of value amid global economic uncertainty.

• MicroStrategy holds 528,185 BTC after its latest March 31 purchase of 22,048 Bitcoin.
• The company’s Bitcoin investment is up 24%, with $8.6B in unrealized gains, according to SaylorTracker.
• Saylor indicates more BTC buys are coming, maintaining the firm’s long-term bullish stance.
• Bitcoin remained relatively stable while stocks lost $5 trillion in value during Trump’s tariff escalation.
• Altcoins plunged over 33%, according to the Total3 market cap tracker.
• Bitcoin’s resilience supports its role as a store of value, not just a speculative asset.
• Adam Back predicts inflation of 10–15% in the next decade, making BTC more attractive compared to traditional investments.
• Back also believes Bitcoin could begin competing with gold for store-of-value use cases.

MANTRA Token Crashes 88%, Triggering $71.8M in Liquidations

MANTRA’s token (OM) plunged over 88%, causing $71.8 million in liquidations within 24 hours. Co-founder blames centralized exchanges for reckless forced closures of user accounts.

• OM token dropped from $5.21 to $0.74, a steep 88.2% decline in 24 hours.
• Over $71.8 million in liquidations, including 10 positions each exceeding $1 million, per Coinglass.
• Co-founder John Patrick Mullin cites centralized exchanges for triggering the crash via forced account closures.
• Crash happened abruptly, with 10% lost in the first hour on Sunday.
• Ongoing legal issues: Hong Kong court previously ordered six individuals linked to MANTRA DAO to disclose financial records amid misappropriation allegations.

MilkyWay

The Origins:

MilkyWay is a modular blockchain ecosystem, specializing in liquid staking and restaking.

It was launched in December 2023 with a mission to unlock greater capital efficiency for TIA holders by allowing them to stake without sacrificing liquidity. Through this, MilkyWay enabled users to participate in DeFi while earning staking rewards.

The Operative:

MilkyWay’s design is tailored for modular chains, combining flexibility, scalability, and user control. Its system is composed of several core products:

Liquid Staking Layer:

• milkTIA represents staked TIA from Celestia, enabling users to retain liquidity and engage with DeFi applications.
• milkINIT is the upcoming equivalent for Initia’s INIT token, offering similar benefits to early users in that ecosystem.

Restaking Infrastructure:

• Users can restake already staked assets or their liquid derivatives to secure additional services, effectively boosting yield without added capital risk.
• This structure supports AVS (Active Validator Services) through customizable slashing and delegation conditions.

Cross-Protocol Integration:

• MilkyWay is integrating with Babylon’s restaking mechanism, allowing Bitcoin to be used as a trust layer for PoS chains. This bridges BTC security with modular ecosystems, bringing Bitcoin into DeFi in a native and non-custodial way.

RWA Expansion:

• The team is also working on a product focused on tokenizing real-world assets, allowing users to access and interact with off-chain value within on-chain frameworks.

Summary & Competitors

In mid-2024, MilkyWay secured $5 million in seed funding. The round was co-led by Binance Labs and Polychain Capital, with support from Hack VC, Crypto.com Capital, and LongHash Ventures, reflecting growing interest in modular staking solutions.

MilkyWay competes in the broader staking sector but distinguishes itself by focusing on modular chains and programmable restaking.

Key competitors include:

• Lido: The most widely used liquid staking protocol, focused on Ethereum with stETH as its core product.
• Rocket Pool: A decentralized staking network offering rETH and enabling smaller validators to participate.
• EigenLayer: A restaking protocol for Ethereum that allows stakers to secure multiple services, boosting overall yield.

As modular blockchain systems evolve, the need for more efficient staking tools becomes critical. Protocols that merge liquidity, security, and interoperability, while maintaining decentralization, are essential to powering the next wave of scalable, capital-efficient blockchain applications.

Tariff War: USA vs. China

The tariff escalation pushed by Trump isn’t new, during his last term he had a trade war with China. And no, it’s not just a whim. It’s a high-stakes strategy with multiple geopolitical and economic goals. Let’s see some points to understand why markets are so volatile right now 🎢

What is Trump aiming for?

• Pressure China to negotiate: force better trade terms like stop IP theft, open their market, and reduce the trade surplus
• Bring manufacturing back home: encourage U.S. companies to reshore production (more local jobs, less dependence on cheap Asian labor)
• Boost his political image: being “tough on China” can win points with key voter groups
• Economic decoupling: reduce dependence on China in strategic areas like tech and pharma

What’s with the “Currency War”?

When one country adds tariffs, the other might devalue its currency to stay competitive (this is keeping exports cheap). China has done this several times.
This sparks a “currency war” where everyone tries to weaken their currency, with some consequences:

• Global FX instability
• Imported inflation
• Capital flight from emerging markets

What about U.S. interest rates?

The Fed is watching this closely, because tariffs will have an impact on:

• Inflation: higher tariffs lead to more expensive imports, so the Fed may hike rates to fight inflation (while Trump wants lower rates 😅)
• Economic activity: rate hikes can slow the economy. If global trade suffers, the Fed might cut rates to avoid recession
• Markets: lower rates are bullish for stocks & crypto, and bearish for the dollar (which Trump likes)
• The dollar: lower Fed rates imply a weaker dollar, so it’s better for exports. But if the Fed stays high while others devalue, USD strengthens and this hurts U.S. competitiveness

How could global trade shift?

Depends on how this all plays out. Possible scenarios:

• Partial U.S. — China deal: lower tariffs + open markets = market rally 🚀 | Unlikely without real concessions
• Full escalation to a global trade split: West (U.S./EU) vs. East (China/Russia)
  | long-term pain for growth
• Gradual decoupling: companies diversify into India, Mexico, Vietnam.
  | “Made in China” slowly loses dominance
• Multilateral negotiations: WTO or regional deals try to stabilize things.
  | Not likely if U.S. stays unilateral

Final thoughts

This isn’t just political noise, it’s a deeper fight for global economic leadership. The effects could last for years.

As an investors, we should try to look past the tweets and the massive green/red candles on the charts. There’s a much bigger game playing out behind the scenes 🎮🌍

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