Crypto Assets industry faces tariff challenges and opportunities

The global economic situation is becoming increasingly tense, and the United States is about to implement a new round of trade war measures. This economic game not only affects traditional industries but is also profoundly changing the Crypto Assets ecosystem. Despite the numerous challenges, the crisis also contains new opportunities.

Bitcoin mining costs rise

As the leader of the crypto market, Bitcoin's mining industry is facing significant changes. The newly imposed tariffs are expected to increase the cost of mining machines by about 17%, directly affecting the return on investment cycle for mining farms. At the same time, the global semiconductor shortage and technology export restrictions have also led to supply chain instability, which could result in supply bottlenecks.

These changes are driving the industry towards centralization. Large mining enterprises may occupy a larger market share due to their financial advantages, while small mining farms face greater survival pressure. The extended payback period for investments may force some small participants to exit the market.

Stablecoin: An Emerging Global Capital Flow Channel

In the context of restricted traditional financial channels, US dollar stablecoins are becoming a new avenue for global capital flow. Many enterprises and individuals are starting to bypass the banking system and directly use USDC or USDT for cross-border payments. The low cost and instant settlement features of stablecoins make them an ideal tool for cross-border trade.

In some countries with strict capital controls, the demand for stablecoins is more urgent. For example, in 2024, when purchasing stablecoins in Argentina and Nigeria, a high premium needs to be paid, reflecting the urgent need for stablecoins as a wealth protection tool.

Expansion of the Dollar Stablecoin Market

After the implementation of the tariff policy, it is expected that the market demand for USD stablecoins will further increase. This has actually formed a "shadow dollar market" that bypasses Federal Reserve regulation, rapidly expanding globally.

Although the issuance of stablecoins is still indirectly influenced by Federal Reserve policies, their liquidity creation mechanism is not directly controlled by the Federal Reserve. This means that even in the case of tightening policies by the Federal Reserve, the stablecoin market may continue to expand the supply of dollars.

The stablecoin market has formed a relatively independent ecosystem, including DeFi platforms, centralized exchanges, and on-chain payment systems. A large amount of capital is trapped in this emerging on-chain dollar economy, rather than flowing back into the traditional financial system. This trend may undermine the effectiveness of the Federal Reserve's monetary policy.

Outlook

Despite the challenges posed by tariff policies, the United States is reshaping the global financial architecture by strengthening off-chain blockades and expanding on-chain dollar liquidity. From decoupling supply chain data to restricted bank clearing and the rapid rise of stablecoins, we seem to be witnessing a financial revolution.

This transformation may drive the Crypto Assets industry closer to its original intention – to establish a peer-to-peer payment system that does not rely on centralized financial institutions. Although the road ahead is full of challenges, the future of the Crypto Assets industry remains full of possibilities.