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President Donald Trump's potential announcement of a tariff on what he's dubbed "Liberation Day" on April 2 could lead to major ramifications across the global financial markets — including crypto, says market analyst Alex Krüger.
On March 24, Krüger posted on X, saying, "Markets crawl higher if headlines remain neutral to benign this week, then freeze as we await April 2, which is reciprocal tariffs day announcement or, as Trump called it, Liberation Day."
Calling the event "10x more important than any FOMC meeting," the analyst said the news of the tariff's announcement could be as huge as "election night."
Uncertainty over Trump's potential trade policy is already seeping into investor sentiment, even as markets cautiously creep towards the rally, hoping for a rollback.
The Dow Jones Industrial Average rose nearly 560 points or 1.3%. According to reports, the S&P 500 rose 1.6 percent, and the tech-heavy Nasdaq Composite advanced about 2 percent.
However, Krüger thinks Liberation Day will be significant for traders as markets can rally or end in a severe crash.
He added, "Trump could go soft, in which case markets would rally fast and furiously. Or it could go half-way, adding uncertainty on timelines, in this case, markets would take out the stops of all longs and shorts. Or go all out, in which case markets could easily crash another 10% to 15%, fast."
Sudden crash possible, says analyst
In a worst-case scenario, he imagines a sudden crash, leading to tense trade negotiations, with investor sentiment hitting rock bottom by mid-April — coinciding with U.S. Tax Day, a notoriously tight liquidity window.
Although the American economy is still strong, most analysts predict a notable slowing down toward late in the year, the analyst believes.
"The U.S. economy is still strong but will likely slow down due to tariffs regardless of the path Trump chooses. But every economist expects a very sharp economic slow-down at the end of the year. Which means it is already largely priced-in," Krüger explained.
“Either way, you all want to be prepared and ready to act on Liberation Day. It will be big," said Krüger, hinting the market to remain cautious.
At press time, the global crypto market cap is sitting at $2.88 trillion, a 3.46% gain from the previous day while Bitcoin is trading at $88,491.46.