A tariff threat capable of shaking the global market has only stirred ripples in the crypto world. When Trump's "tariff stick" was waved again, Bitcoin's mere 1% drop announced the birth of market immunity.
On October 20, U.S. President Trump declared that if a trade agreement is not reached by November 1, China could face tariffs as high as 155%. However, unlike before, this news, which could have triggered a market earthquake, only led to a drop of about 1% in Bitcoin on that day.
This relatively mild market reaction reveals a new phenomenon: Trump's "TACO" trading strategy is gradually becoming immune in the crypto market, as investors have learned to position themselves in advance in this "threat-reversal" game.
01 TACO Trading Strategy: From Market Panic to Expectation Game
The "TACO" strategy, short for "Trump Always Chickens Out," has become a familiar political game in the financial world. This concept, proposed by Financial Times columnist Robert Armstrong, accurately summarizes Trump's unpredictability in major decisions, especially regarding tariff policies.
The market transmission channel of the TACO strategy has formed a fixed pattern: release extreme threats → trigger panic selling in the market → retract threats on the brink of market collapse → market rebounds sharply.
The market performance in mid-October is a typical case of TACO trading. On October 11, 2025, Trump threatened to impose a 100% tariff on Chinese goods, causing the crypto market to evaporate over $500 billion overnight, with total liquidations reaching $19.3 billion.
However, when Trump quickly shifted his tone and signaled "talks with China," market sentiment rapidly warmed, and Bitcoin quickly recovered to above $110,000, with mainstream coins generally rebounding over 10%.
02 Market Immunity Emerges: Calm Response to Tariff Threats
In stark contrast to the violent fluctuations in mid-October, this latest threat of a 155% tariff only elicited a slight reaction from the crypto market, with Bitcoin prices holding near the key support level of $110,000.
This significant change in market response indicates that investors have become familiar with the TACO strategy's routine. Compared to early April, the market's reaction to U.S. tariff rhetoric has noticeably weakened, having developed immunity after multiple impacts from Trump's "tariff stick." This round of 'tariff threats' feels more like a political statement than a substantive policy, and the formation of this market consensus has led investors to no longer engage in blind panic selling.
CME Bitcoin futures performance also confirms the market's calm response. Against the backdrop of tariff threats, the main BTC contract still rose 4.36% compared to last Friday's New York close, remaining above $111,000 and continuing to oscillate at high levels.
The maturity of the market is also reflected in investor behavior. In response to Trump's threats, China's Ministry of Commerce stated: "Threatening with high tariffs is not the right way to engage with China," while reiterating "We are not willing to fight, but we are not afraid to fight." This calm response tone also provides stability to the market.
03 Formation of Immunity Mechanism: Four Key Evidence of Market Learning
The crypto market's immunity to TACO trading is the result of a series of market learning behaviors, mainly reflected in four key aspects.
Anticipation Preceding Action
Savvy traders no longer wait for policies to be formally announced but instead anticipate Trump's negotiation strategies in advance. If a TACO trade is likely, a short-term drop provides a good buying opportunity. Market participants have begun to look for entry points when Trump issues threats, rather than blindly following the crowd to sell.
Optimized Leverage Management
After experiencing the liquidation lesson of $19.3 billion on October 11, investors have clearly strengthened their leverage management. In this recent tariff threat event, the scale of liquidations across the network has significantly decreased.
"The TACO market is a 'meat grinder' for high-leverage contract traders," this understanding has taken root. Investors generally adopt defensive strategies of reducing leverage and maintaining sufficient margin.
Diversified Asset Allocation
To cope with market fluctuations triggered by political rhetoric, investors are building more resilient portfolios. A Bitget Wallet research report suggests: "Do not put all your eggs in one basket; appropriately allocate assets of different risk levels in your portfolio."
El Salvador's action of diversifying its national Bitcoin reserves into multiple wallets also reflects the market's emphasis on risk diversification to some extent.
04 Structural Change: Increased Maturity of the Crypto Market
The change in the crypto market's response to TACO trading not only reflects immunity to a specific strategy but also reveals the structural maturity of the entire crypto market.
● Increased market depth and liquidity is the foundation supporting this immunity. Despite facing tariff threats, Bitcoin's daily trading volume remains stable, with significant buying support. Compared to the crash on October 11, this market performance shows stronger inherent stability.
● Increased institutional participation has also changed market dynamics. Institutional investors like Bitmine have significantly increased their holdings in Ethereum (with a cumulative increase of $800 million this week), providing a stable funding base for the market and reducing the impact of individual rhetoric on the market.
● Gradual clarity of regulatory frameworks has also reduced policy uncertainty. The U.S. Department of Justice's seizure of $15 billion worth of Bitcoin and the crackdown on Southeast Asia's "pig-butchering" schemes mark the maturation of crypto regulation, reducing the market's sensitivity to the statements of a single political figure.
05 Risks and Outlook: New Challenges Under Immunity
Although the market shows immunity to TACO trading, potential risks still exist, and investors need to be wary of complacency that may arise from this immunity.
● The "wolf is coming" effect is the biggest potential risk. The Bitget Wallet research report warns: "If an extreme policy is truly implemented without subsequent easing, investors accustomed to counter-trend operations may face devastating blows due to lack of preparation."
● Changes in market structure may also alter the rules of the game. The proliferation of algorithmic trading has intensified the market's "knee-jerk reflex," as programmatic models can capture information and execute large-scale operations in milliseconds. This means that any unexpected policy changes could still trigger severe volatility.
● Geopolitical complexities are another uncertain factor. In addition to U.S.-China trade relations, the Trump administration has also implemented differential tariff measures against countries like Canada, Mexico, Brazil, and India under the International Emergency Economic Powers Act, and these complex factors could produce chain reactions.
Looking ahead, as long as Trump continues to use the "threat-reversal" negotiation strategy, TACO trading will not disappear, but the crypto market's response may become increasingly muted. The market's immunity to the TACO strategy signifies that the crypto market is transitioning from a rebellious adolescence to a mature youth—still sensitive but no longer overreacting to every stimulus.
As the November 1 tariff deadline approaches, all eyes will be on the next moves from both China and the U.S. This time, however, it seems that players in the crypto market are ready; regardless of the outcome, they have learned to survive and profit in this new environment filled with "Trump noise."
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