US-China trade deal could shed light on Bitcoin’s use case: Trader

Bitcoin’s price movements in relation to US-China trade negotiations offer insights into its role as a safe-haven asset. In April, following President Trump’s tariff announcements, Bitcoin significantly outperformed the stock market, recovering strongly from a dip to $75,000 to reach approximately $95,000 by month’s end, while the S&P 500 and Nasdaq declined. This led to speculation that Bitcoin was being used to circumvent tariffs.

However, crypto trader Daan Crypto posited that if a trade deal materializes, Bitcoin’s outperformance should cease, suggesting that trade uncertainty, rather than tariff avoidance, fueled its strength. The analyst’s hypothesis is that if the deal alleviates trade uncertainties, Bitcoin’s relative strength will diminish. Subsequently, the White House announced “substantial progress” in US-China trade talks, though no official agreement was reached. Treasury Secretary Scott Bessent stated that details would follow, indicating productive discussions. Daan Crypto concluded that continued Bitcoin outperformance would indicate minimal direct impact of tariffs on Bitcoin’s usage.

Conversely, other analysts anticipate a positive Bitcoin price reaction to a trade deal, alongside potential rate cuts. Jeff Mei of BTSE believes reduced institutional apprehension regarding Bitcoin and cryptocurrencies will result from concluding US-China trade talks and the increased likelihood of rate cuts. HashKey Capital’s Jupiter Zheng suggests a trade deal could stabilize global markets, potentially driving investment into alternative assets like Bitcoin, potentially leading to new highs, especially if the dollar weakens or liquidity flows into emerging markets increase.

Analyst Will Clemente, however, emphasized the need for a concrete trade deal announcement to maintain Bitcoin’s momentum, noting a recent stall in upward movement. The overall sentiment suggests that the outcome of US-China trade negotiations will significantly impact Bitcoin’s price, with varying opinions on whether it will act as a safe-haven asset or benefit from increased investor confidence in a stabilized global market.