Sophia’s Thoughts on the 90-Day Tariff Pause
Trump may have paused tariffs for 90 days, but the aftershocks are still rippling through the markets—especially across the crypto mining industry.
These are Sophia's Thoughts:
Markets moved from panic to slight optimism after Trump’s sudden 90-day tariff pause, and crypto held firmer ground through the storm.
Even with the temporary relief, U.S. miners are feeling the squeeze as rising costs, supply chain fragility, and shifting hashrate threaten long-term competitiveness.
Investor sentiment is cautiously improving after hitting “extreme fear,” but uncertainty still looms large.
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🚀 Last week’s market performance
The crypto market rebounded this week after President Trump announced a 90-day tariff pause. The market gained 7.0% while Bitcoin (BTC) rose 6.9%. The best performing coin of the week was Helium (HNT), which gained 39.7% after receiving a dismissal from the SEC from an ongoing securities lawsuit. The worst performing coin this week was Mantra (OM) which collapsed last week, wiping out over USD 5 bn, resulting in the token crashing 90.5%.
🧐 What is your crypto mood today?
In each Sophia's Thoughts newsletter, we ask about your crypto mood. Your response to this question helps Sophia get a better sense of the pulse of crypto markets. And this ultimately translates into better insights for you when combined with Sophia's AI models. Your data empowers Sophia to provide you with even better intelligence going forward!
📊 What happened in the markets?
Markets kicked off April in chaos as President Trump ramped up his tariff campaign. Early in the month, sweeping new import duties, up to 50% on some countries and 125% on China, sparked a wave of panic across global equities. The S&P 500 fell over 10% in just two days, slashing its year-to-date gains while the Nasdaq slid into correction territory. The Dow also took a hit, and bond yields rose to 4.49% as investors moved away from Treasuries.
Then came a sudden reversal. On April 9, Trump announced a 90-day tariff pause for most countries, softening rates to a flat 10%, with China still facing steep penalties. Markets responded immediately: the S&P 500 jumped 9.5%, its biggest one-day gain since 2008, while the Nasdaq soared 12.6%. Safe havens like gold hit record highs before cooling off, and yields pulled back as fears eased.
Crypto mirrored the volatility but held firmer ground. Bitcoin bottomed on the 9th at USD 74,500 before rebounding to USD 82,500 by Friday. Ethereum and Solana rallied too, both up over 10%. Traders pointed to a weakening dollar and speculation around yuan devaluation as tailwinds, but also warned this could be a temporary reprieve. With just 90 days on the clock and China still facing steep duties, the ripple effects of these tariffs are already hitting U.S. miners.
🛠️ How Tariffs Are Hitting Bitcoin Miners
Before Trump’s April 9 tariff pause, the Bitcoin mining industry was in scramble mode. Faced with potential duties on essential equipment from Southeast Asia, U.S. miners rushed to import ASIC rigs. Luxor alone moved 5,600 machines in under 48 hours, chartering flights that cost between USD 2–3.5 million each—up to 4x the usual rate. “It’s literally chaos every day,” said Luxor CEO Nick Hansen, while COO Ethan Vera compared the disruption to China’s 2021 mining ban. Though the 90-day pause capped tariffs at 10% for most countries, with China still facing 125%, the panic underscored how fragile the mining supply chain has become.
Even at 10%, tariffs are material enough to raise the cost of doing business. ASIC rigs like the S21, which sell for around USD 3,400, are now subject to higher component costs, with Chinese-made parts facing tariffs of 50% or more. That’s eating into already thin margins. Hashprice, the revenue miners earn per unit of computing power, fell below USD 40/PH/s (Peta hash per second) last week, its lowest level since September 2024. Vera warned that if tariffs remain, U.S. hashrate growth could stagnate. Some companies may choose M&A over importing new machines, as domestic facilities with aging rigs suddenly look like valuable targets in a constrained market.
Geographically, the pressure is shifting mining focus abroad. Canada, Malaysia, and even regions in South America and Africa are being considered as alternatives, especially given Canada’s planned corporate tax and capital gains cuts. But there are limitations; provinces like Ontario have moratoriums on new mining power applications. If the U.S. loses ground in hosting Bitcoin mining, currently accounting for 35–40% of global hashrate, it could lead to a more decentralized but less U.S.-controlled network. “All of this results in a profitability crunch, slower growth, potential consolidation, shutdown costs or shifts of hashrate away from the US,” Eli Nagar, CEO of mining firm Braiins. While the mining industry scrambles to adjust and awaits clarity on tariff restrictions, investors are trying to make sense of the broader macro picture.
📉 How are markets feeling now?
Investor sentiment has shifted rapidly over the past week as markets digest the implications of Trump’s 90-day tariff pause. Initially, fears of a full-blown trade war pushed sentiment into the “extreme fear” zone, with Polymarket recession odds peaking at 66% on April 9. Those odds have since fallen to 54%, signaling tentative optimism. Bitcoin’s Fear & Greed Index echoed that mood, climbing from the high teens to 31, still in “fear” territory. “The index has been in the range of 18–45 for the last seven days, showing positive dynamics and supporting the improvement of market sentiment,” said Alex Kuptsikevich, chief market analyst at FxPro. Sophia has also seen that while market sentiment has drifted downward over the past month, coin-level sentiment is quietly rebounding, suggesting that investor confidence in individual crypto assets is beginning to firm up.
Meanwhile, expectations for a Fed rate cut have cooled. A week ago, markets gave a 44.5% chance of a cut at the May 7 FOMC meeting; that number has dropped to 17.7% today, according to CME FedWatch. The pause in tariffs briefly fueled dovish hopes, but with inflation risks still looming, the Fed appears more likely to hold steady.
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