From strong threats to last-minute retreats, Trump's "TACO strategy" is creating waves in global financial markets, with the cryptocurrency market being the first to feel the impact.
"I spoke with Indian Prime Minister Modi, and he said he would not continue to buy Russian oil." On October 20, Trump made this claim to reporters aboard Air Force One, adding that if India does not comply, "they will just have to continue paying hefty tariffs."
However, the Indian Ministry of External Affairs immediately denied that the two leaders had any such recent communication. Data also contradicted Trump—preliminary figures from global trade analytics firm Kpler showed that in the first half of October, India's oil imports from Russia actually increased, averaging about 1.8 million barrels per day, up by about 250,000 barrels from September.
This diplomatic drama is a typical example of the "TACO" strategy: short for "Trump Always Chickens Out," a term coined by Financial Times columnist Robert Armstrong.
01 Trading Model: Decoding the TACO Strategy
TACO, which stands for "Trump Always Chickens Out," was created by Financial Times columnist Robert Armstrong.
It accurately summarizes Trump's negotiation style: initially making exorbitant demands on issues like tariffs to create pressure, but ultimately backing down to reach an agreement. After multiple repetitions, this pattern has formed a predictable market transmission path.
Four Stages of TACO Trading
Typical Impact on the Cryptocurrency Market
Release of Extreme Threats
Causes panic selling in the market, leading to significant declines in cryptocurrencies like Bitcoin.
Market Panic Selling
High-leverage contracts face massive liquidations, and market liquidity nearly dries up.
Last-Minute Retreat
Releases signals of easing, denying or downplaying previous threats.
Retaliatory Rebound
The cryptocurrency market rebounds significantly, often exceeding the rebound strength of traditional assets.
Source: AiCoin Compilation
On October 11, Trump threatened to impose tariffs on Chinese goods, and Bitcoin immediately plummeted by 15%, while Ethereum dropped over 20%, with many altcoins falling more than 70%.
Less than two days later, he softened his stance, and Vice President Pence also stated that the development of Sino-U.S. trade largely depends on China's response; if China remains rational, the U.S. will also be a rational negotiator.
02 Market Impact: From Panic to Immune Investors
As the TACO script plays out repeatedly, the market's response is evolving from panic to rationality.
● In recent events, the market's reaction has noticeably calmed down; past sharp declines have quickly created buying opportunities, and now there is more of a consolidation phase, indicating that investors are beginning to become immune to Trump's "tariff thunder."
● More importantly, the market has shifted from passive responses to proactive predictions. Before easing news was announced, Bitcoin's price had already risen in anticipation, leading to a weakening of upward momentum when the positive news actually materialized.
This "running ahead" behavior indicates that traders are learning how to seek short-term opportunities within these predictable fluctuations.
03 The India Incident: A New Test of Geopolitics
Trump's TACO strategy is not only evident in trade with China but also applies to other international relations.
● On October 20, he revealed that India had committed to stopping the purchase of Russian oil, but the Indian side subsequently stated that it would prioritize the interests of Indian consumers in the energy sector.
● New Delhi neither confirmed nor denied any shift in its policy regarding the purchase of Russian oil.
● This incident once again showcases another form of TACO trading—gaining negotiation leverage through extreme claims, then quietly retreating when faced with actual difficulties.
04 The New Normal in the Cryptocurrency Market: The Main Battlefield of Macroeconomic Games
The repeated enactment of the "TACO" strategy is profoundly reshaping the ecology of the cryptocurrency market.
● Due to strong liquidity and 24-hour trading, cryptocurrency assets often react first to Trump's statements. Every time Trump speaks, it not only stirs stocks, currencies, and bonds but also becomes a trigger for Bitcoin and Ethereum sentiment.
● In the market bloodbath on October 11, according to AiCoin data, within just 24 hours, the total liquidation amount reached $19.3 billion, with over 1.67 million investors liquidated, and the global cryptocurrency market capitalization evaporated by over $500 billion.
● The most direct impact of this strategy is the comprehensive upgrade of market gaming dimensions. While value analysis based on project fundamentals or on-chain data remains important, a high-frequency macroeconomic battleground dominated by "tweets" and "headline news" is quietly taking shape above it.
05 Future Outlook: Finding Certainty Amid Uncertainty
● Looking ahead, as long as this political game of creating crises to gain leverage continues, "TACO trading" will not disappear.
● Traders will focus more on finding short-term opportunities within these predictable fluctuations, thus shaping sharper "V-shaped reversals."
Recent major cases of Trump's TACO trading and market responses show the evolutionary trajectory of this strategy.
Time
Trump's Action
Market Reaction
Final Result
October 11, 2025
Threatened to impose 100% tariffs on Chinese goods
Bitcoin plummeted 15%, total liquidations reached $19.3 billion
Two days later, softened stance, market rebounded significantly
October 13, 2025
Stated "I want to help China, not hurt it"
Bitcoin rose above $115,000
Total market cap of cryptocurrency returned to $4 trillion
October 20, 2025
Claimed India would stop purchasing Russian oil
Crude oil prices continued to be under pressure
India stated it would prioritize its own energy interests
Source: AiCoin Compilation
06 Investment Strategy: Surviving Amid Political Noise
In the face of such a volatile market, investors need new survival rules.
● The primary principle is to respect leverage and control risk. The "TACO" market is a "meat grinder" for high-leverage contract traders; in news-driven extreme markets, any high-leverage position can instantly go to zero.
● Secondly, investors should pay attention to cross-market signals, especially the performance of U.S. stock futures and gold, as changes in sentiment in these traditional assets often provide early warnings for cryptocurrency market trends.
● Most importantly, investors need to tune out the noise and return to common sense. Instead of obsessing over when the next reversal will occur, it is better to take a long-term view and focus on the project's long-term value.
As Trump and Putin are set to hold peace talks, a new geopolitical shift is brewing. The geopolitical risk premium in the crude oil market has significantly retreated, with domestic SC crude oil futures even hitting a four-year low. For the cryptocurrency market, Trump's TACO strategy has become not only a tool for political games but also an intrinsic factor of market volatility.
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