US-China Trade Truce: A Boost for Bitcoin and Global Markets?
on May 11–12, the U.S. and China declared a 90-day trade truce, easing global market tensions. This temporary ceasefire followed months of escalating tariffs and economic uncertainty.
The agreement, reached in Geneva, includes significant tariff reductions. The U.S. lowered tariffs on $350 billion of Chinese imports from 145% to 30%.China reciprocated by cutting duties on $120 billion of U.S. goods from 125% to 10%. Key sectors like agriculture, energy, and technology will benefit.
China agreed to resume buying boeing aircraft and import $50 billion annually in U.S. soybeans and liquefied natural gas. Both countries also eased restrictions on semiconductor exports.
Financial markets responded positively. The S&P 500 jumped 3.26%, and the U.S. dollar weakened slightly. This shift in global trade dynamics has also influenced crypto prices.
Bitcoin (BTC) surged to $105,740, its highest in over a month. The Crypto Fear and Greed Index rose to 70, indicating growing optimism. Bitcoin’s rally, fueled by spot ETF inflows, has made it the sixth-largest tradable asset globally.
Ethereum (ETH) also gained, rising nearly 44% to $2,560. The total crypto market cap is now $3.32 trillion, up from April’s low of $2.42 trillion.
As trade tensions ease, the macroeconomic backdrop is shifting. Inflation may cool, and rate cut odds could rise. This could further support risk assets, including cryptocurrencies.
US-China Trade Truce boosts Crypto Market Sentiment
The recent US-China trade agreement could be a game-changer for the crypto market, especially for Bitcoin. Before the deal, both countries had imposed tariffs over 100%, sparking fears of global price hikes.
these concerns made conventional inflation measures seem unreliable. many saw the positive US CPI data in March as disconnected from the trade tensions. Now, with tariffs easing, this gap may close. The case for trade-driven inflation is weakening, which is crucial for those watching monetary policy.
If inflation continues to drop, the Federal reserve might cut interest rates. This could boost liquidity for risk assets like Bitcoin. The latest April CPI data supports this trend, with headline inflation at 2.3%, below expectations.
Fed Chair Jerome powell noted the “good” underlying inflation picture and called tariff effects “short-lived.” The Fed left rates unchanged, maintaining a data-dependent stance.
From a market viewpoint, softer CPI data and Powell’s dovish tone could push Bitcoin beyond $110,000. However, the 90-day trade truce has caveats. Tough negotiations loom,especially on technology exports and AI governance.U.S. restrictions on Nvidia and TSMC chips remain.
Geopolitical factors, like china’s military activity near Taiwan, could also impact markets. If tensions rise, investors might turn to safe-haven assets like gold or the U.S. dollar.
Experts have mixed views on the crypto market’s next move. Charles Wayn from Galxe sees the truce as a positive shift, boosting macro sentiment. He believes Bitcoin could reach new highs, with altcoins also rallying.
However, Kai Wawrzinek from Impossible Cloud Network points to unresolved infrastructure risks. he notes ongoing ambiguity around chip access and cloud dependencies as critical issues.
Cloud Industry Hesitation Spurs Decentralized Infrastructure Growth
Despite a slight advancement in sentiment, the cloud industry is still cautious about making big moves. According to Wawrzinek, even tech giants like Microsoft and Amazon have paused significant spending on data centers. This hesitation is due to ongoing trade tensions, which create uncertainty for providers.
Though, this situation presents an opportunity for decentralized infrastructure. These networks are less vulnerable to risks like outages and hacks,which often stem from single points of failure in centralized systems. They also offer lower costs and are less affected by political and corporate conflicts.
On-chain data suggests that crypto markets are responding positively to this shift. PlanB, a well-known crypto analyst, compares the current momentum to past bull cycles. He predicts that Bitcoin could reach $400,000 in the next four months,based on its Relative Strength Index (RSI).
Blockchain analytics firm santiment has also noticed a divide among Bitcoin holders. Large wallets have accumulated over 83,000 BTC in the past month, while smaller holders have sold nearly 400 BTC. This could signal that big players are confident about Bitcoin’s potential to hit its all-time high of $110,000.
While these early signs are promising, they don’t guarantee a sustained trend. Market cycles often start by eliminating weaker investors before confirming a new direction. So,its important to trade cautiously and only invest what you can afford to lose.
