Can the $2000 "tariff bonus" announced by Trump really bring a liquidity feast?

Original Title: “A $2000 Christmas 'Robbery': Trump and His Tariff Windfall”

Original source: On-chain Revelation

Every Christmas, children receive gifts from a mysterious old man, and they never question the cost of the gifts. Today, Donald Trump is trying to play Santa Claus for the adult world, promising to distribute a $2000 “tariff bonus” that falls from the sky, claiming the gift is paid for by distant “foreign factories.” The crypto market is as excited as a group of children eager to unwrap their gifts. But this grand magic show has an overlooked detail: before applauding that suddenly appearing rabbit, no one asks whose dinner it was exchanged for. And who will go hungry tonight?

1. When the President announces nationwide money distribution: A carnival dedicated to the market

Source: Donald Trump

The cryptocurrency market is like a diner who never cares about who pays for dinner, only smelling the aroma.

The last time they celebrated was during the pandemic stimulus checks; this time, the main dish of the feast has been replaced by Donald Trump's new gimmick—“Tariff Dividend.” This 79-year-old “Santa Claus” who hurriedly “took office” more than a month in advance officially announced on November 9 on his social platform Truth Social that he would distribute $2,000 in cash to every low- and middle-income American. The “magic” that conjures up this money is not the traditional printing press, but his favored import tariffs.

The market was thunderous with applause and unwavering. Within minutes of the announcement, Bitcoin rose by 1.75% and Ethereum by 3.32%. Privacy coins, such as Zcash and Monero, which are more sensitive to the “anonymous money distribution” narrative, recorded crazy gains in double digits. The trading volume on crypto exchanges surged instantly, and cheers for the “new stimulus bull market” echoed endlessly on social media.

Clearly, for this group of excited “kids”, Santa Claus has already set off with his sleigh.

The Gift Box Opened in Advance: Source of Dividends

Trump's obsession with tariffs dates back to his 2016 campaign promise - “America First.”

He firmly believes that high tariffs can protect American manufacturing and make foreigners pay for America's debts. After taking office, he quickly launched a trade war with economies such as China and the European Union, imposing high tariffs on imported steel, aluminum, and consumer goods.

This logic is simple yet dangerous: Tariffs are described as “protection fees” paid by foreign entities, rather than as hidden taxes borne by American consumers.

By the fiscal year 2025, U.S. tariff revenue will reach $195 billion. Trump has repeatedly claimed that this revenue could be used to pay off the $37 trillion U.S. national debt. However, economists point out that companies simply pass the costs onto consumers, resulting in rising inflation and decreasing purchasing power.

But in the eyes of Trump's supporters, this is a victory - tariffs make “foreigners pay, America richer.” This narrative laid the political groundwork for his proposal of “tariff dividends.”

How are dividends created?

The concept of “tariff dividends” did not come out of nowhere. In a television interview last month, Trump hinted at plans to return a portion of tariff revenue to Americans—between $1,000 and $2,000 per person. He claimed that this policy could generate over $1 trillion in revenue each year, enough to cover universal dividends.

On November 9, he officially announced his plan on Truth Social: “We are collecting trillions of dollars and will soon start paying off our huge debts. Everyone (excluding high-income groups!) will receive at least $2000 in bonuses.”

Treasury Secretary Scott Bessent later hinted that the dividends could be distributed in the form of tax cuts. But Trump did not provide specific details.

In other words, this shiny gift box is empty when opened. There is no timetable, no qualification standards, and certainly no nod from Congress.

According to the investment analysts at Kobeissi Letter, based on the distribution pattern of stimulus checks during past pandemics, approximately 220 million American adults currently qualify to receive these stimulus checks. Formally, this sounds like a “fiscal innovation”; substantively, it is a replay of a political script. First, call out slogans, stimulate market reactions.

On the surface, it sounds like a “financial innovation”; in essence, it is a replay of a political script. First, shout slogans to stimulate market reactions.

The market has muscle memory. It clearly remembers that in 2020, the stimulus checks issued by the U.S. government caused Bitcoin to soar from $4,000 to $69,000, marking the most frenzied bull market in crypto history. The market naturally anticipates a “repeat of history”, kicking off the wildest party in crypto history. Now, the familiar music plays again, and the market naturally expects a “repeat of history.”

But this time, the magician's trick has flaws: the party back then was the Federal Reserve conjuring up fine wine out of thin air; today's “dividend” is merely pouring some of the guests' wine into the glasses of other guests. It is not a new feast, but just a rearrangement of tax revenues. Both its scale and sustainability are filled with question marks.

After the last round of stimulus measures was introduced, the inflation rate in the United States approached 10%.

2. The Frenzy of Advances and Unpaid Bills: Emotions, Revelry, Illusions

Short-term Frenzy in the Market: Sentiment Leads, Cash Yet to Arrive

The crypto market always reacts quickly to stories.

Within 24 hours of the announcement, mainstream cryptocurrencies such as Bitcoin, Ethereum, and Solana saw a rally across the board.

“Stocks and Bitcoin will only react to stimulus—by rising.” Investor Anthony Pompliano wrote on his personal X platform after the news was released.

Bitcoin advocate Simon Dixon reminds us: “If you don't invest that $2,000 into assets, it will either be eaten away by inflation or used to pay off debt, ultimately flowing back to the bank.”

This statement reveals the core psychology of the market: regardless of whether the stimulus is genuinely implemented, liquidity expectations are the fuel for price increases.

But this wave of increase feels more like an illusion of psychological speculation.

1. First of all, the policy has not yet received any legislative authorization. If the Supreme Court rules that the related tariffs are illegal, the dividend program may be stillborn.

2. Secondly, even if implemented, it means that fiscal revenue is directly allocated rather than used for debt reduction. Trump's promise of “repaying American debt with foreign money” is likely to fall through again.

3. More importantly, large-scale cash distribution will increase inflationary pressures, forcing the Federal Reserve to adopt a more hawkish monetary policy. At that time, liquidity will tighten, and risk assets will be the first to bear the brunt.

Industry investment analysts warn that while some dividend funds will flow into the market, pushing up asset prices, the long-term consequences will be fiat inflation and a decrease in purchasing power.

The Game of Prediction Markets: Kalshi vs Polymarket

Behind the frenzy, a legal battle is underway. The U.S. Supreme Court is currently reviewing a case regarding the legality of tariffs. As of the publication date on November 10, according to data from the decentralized prediction market Polymarket, traders assign a probability of only 23% for the Supreme Court's approval; on the prediction platform Kalshi, this figure is even lower, at just 22%. In other words, the majority of the market bets that the plan will ultimately be struck down by the judiciary.

Source: Polymarket

But Trump himself is clearly a more outstanding “director of drama.” He directly questioned on Truth Social:

“The President of the United States is authorized by Congress to stop all trade with foreign countries—this is much stricter than imposing tariffs—yet cannot impose taxes for national security purposes? What kind of logic is this?”

Look, with just one sentence, he cleverly reshaped a dull controversy into a political drama about “sovereignty.”

This dramatic strategy is almost second nature for someone who once made a cameo in the Christmas classic movie “Home Alone 2” and guided the young protagonist on how to find the lobby, the “big shot”.

3. Behind Christmas Candy: A Cavity Called “Inflation.”

In other words, behind the short-term carnival is a familiar script, the director hasn't changed, only leaving the problems for the next actor.

The “tariff dividend” is meticulously packaged as a Christmas gift box, but it feels more like a melt-in-your-mouth Christmas candy, with its sweet flavor (short-term stimulus) leaving behind the “inflation” cavity that is hard to cure.

1. The $195 billion revenue from tariffs, compared to the $37 trillion national debt, is like trying to fill a swimming pool with a single coin. Distributing this coin directly is no different from using future money to buy present applause.

2. The short-term political popularity comes with long-term financial risks. Economists warn that this policy may create “double inflation”: tariffs raise costs, and dividends stimulate demand, like pressing the accelerator and brake simultaneously on a speeding car, ultimately leading to engine overheating and destruction.

3. The geopolitical aspect is also not to be ignored. This noisy family party may also attract complaints or even retaliation from neighbors (other countries). When the snowball of the trade war begins to roll again, the windows of the global supply chain will creak, which is no different from a snowstorm, especially for crypto mining that relies on global chips.

In other words, behind the short-term frenzy is a familiar script. Santa Claus just stuffed a bill written with “inflation,” “deficit,” and “trade war” into next year's Christmas stocking.

5. The Last Person to Leave the Table

In this grand political drama, Santa Trump has prepared a special gift not only for the ordinary people but also for the crypto world. When he announced that he would take out $2,000 for every American from that red pocket named “Tariff,” the entire crypto market seemed to have heard the bells of Christmas Eve in advance.

Today, the historical sleigh seems to be following the old tracks. The children in the market (retail investors) are eagerly staring at the chimneys, convinced that some gifts will fall directly into their crypto wallets, marking the start of another “altseason.”

However, every child who believes in Santa Claus eventually has to face a real question: what is the cost of the gifts?

This time, Santa's gifts were not conjured up out of thin air in a workshop in the North Pole; he simply lavishly maxed out the country's credit card. This feast, totaling over $400 billion, has a bill known as “inflation.” When the heat of the holidays causes the entire room (economy) to become overheated, the adults (Federal Reserve) may have to open the windows to let in some cool air (interest rate hikes), bringing this celebration to an early end.

So, what lies before every crypto investor is a beautifully wrapped gift box. In the short term, it shines with the alluring luster of history repeating itself; but in the long term, the back of the box may be printed in small letters with a bill for “inflation.”

Is this truly a gift that can warm the entire winter, or is it a Christmas candy that melts in your mouth but will lead to cavities? For the believers in the crypto world, choosing which story to believe will determine whether they can emerge unscathed from this feast. The last one to leave the party pays the bill.

Source: On-chain Revelation