The global asset divergence is intensifying, and Crypto Assets have become a new balancing point.

Recently, the global economic situation has been turbulent. At the beginning of April, a major tariff policy triggered a significant decline in global assets. However, shortly after, policymakers indicated that tariffs would be significantly reduced and confirmed the stability of the Federal Reserve leadership, easing market concerns. After investors' sentiments were calmed, a new wave of risk appetite emerged, with Bitcoin leading a strong rise.

From the economic data, the macro indicators such as consumption and employment in the U.S. in April have not yet been substantially impacted, but the risks have clearly increased. In March, U.S. non-farm employment increased by 151,000, and the unemployment rate rose to 4.1%, performing better than expected. However, the newly implemented tariff policy caused the average tax rate to soar from 2.4% to 21.4%, with the import price index rising by 18.6% year-on-year. Although retail sales in March saw a significant month-on-month increase of 1.4%, the actual consumption growth excluding automobiles was only 0.5%, a decrease of 0.15 percentage points from the previous month.

This policy-driven short-term consumption overdraft stands in stark contrast to the significant decline in the consumer confidence index. In April, the University of Michigan's consumer confidence index recorded its largest drop since 1978, declining for the fourth consecutive month. At the same time, inflation expectations have risen significantly, with both the 1-year and 5-year inflation expectations reaching multi-decade highs. The deterioration of these soft indicators reveals the unsustainability of economic development.

The US economy is facing the stagflation dilemma of "high inflation - low growth - policy conflict." The negative impact of tariff policies will gradually manifest through three channels: the supply chain, the labor market, and consumer confidence. The latest report from the International Monetary Fund has lowered global economic growth expectations, with significant downward revisions for the growth forecasts of the US and the Eurozone.

The Federal Reserve faces severe challenges. The PCE inflation rate has been above the 2% target for 14 consecutive months, and short-term inflation expectations have reached a 40-year high. Against this backdrop, the Federal Reserve kept interest rates unchanged in March, falling into a triple dilemma: lowering rates could exacerbate runaway inflation expectations, raising rates would accelerate economic recession, while maintaining the status quo faces political pressure. The Federal Reserve Chairman stated that they will continue to observe the economic situation and consider adjusting interest rates only after waiting for clearer signals.

In April, dollar assets were hit by a dual blow of policy uncertainty and economic downturn. At the beginning of the month, the three major U.S. stock indices experienced a historic drop, with tech stocks being the hardest hit. However, there was a significant rebound by the end of the month, partly due to expectations of possible adjustments to tariff policies and better-than-expected earnings reports from tech giants. Nevertheless, Wall Street generally believes this may only be a "technical recovery in a bear market," as U.S. stocks still face policy uncertainty and the risk of economic recession.

In contrast, Bitcoin has performed exceptionally well, redefining its position among global assets. In mid to late April, Bitcoin broke through $94,000, reaching a new high for the year, rising in tandem with gold, highlighting its "digital gold" attribute. The stability of Bitcoin has attracted a significant influx of funds, pushing the total value of the global Crypto Assets market to over $3 trillion.

Long-term holders are enjoying substantial returns as Bitcoin's market value has surged to become the fifth largest asset globally, surpassing several tech giants and silver. Notably, Bitcoin's long-term correlation with U.S. tech stocks has shown signs of "decoupling," demonstrating independent market performance and changes in asset characteristics.

Crypto assets are rewriting the logic of global asset pricing. Some investment institutions have significantly raised their long-term target price for Bitcoin, reflecting an increasing acceptance of it as "digital gold."

Looking to the future, market trends will depend on whether the tariff war can be resolved in a timely manner and the trajectory of the US economy. In the short term, market divergences remain, and volatility is inevitable. However, when traditional financial markets are shaken by various factors, the independence and counter-cyclical properties of Crypto Assets may attract more capital seeking diversified asset allocation.