Is Bitcoin the Safe Haven Amidst Renewed U.S.-China Trade Conflicts?

Key Points

• China’s 34% tariff retaliation has intensified global trade tensions, impacting Bitcoin and other markets.
• Despite escalating trade tensions, Bitcoin is seen as a resilient hedge and the crypto market may remain more resilient than traditional equities.

China’s response to the latest trade measures from the U.S. has heightened tensions in the global economy.

China’s Tariff Retaliation

Following President Donald Trump’s announcement of reciprocal tariffs on April 2nd, China retaliated with a 34% tariff on all U.S. imports, effective April 10th. This escalation of the trade war has raised concerns across various markets, including cryptocurrency.

Bitcoin (BTC) , which had briefly climbed to $84,000, fell below $82,000 after China’s announcement. The potential for the European Union to introduce countermeasures could further increase market volatility, particularly in the digital asset space.

Analysts’ Confidence in Bitcoin

Despite the market turmoil, analysts like Eric Weiss remain optimistic about Bitcoin, suggesting that it could be an alternative to Wall Street as the tariff war escalates and stocks suffer. The U.S. dollar also took a hit following the announcement, with the Dollar Index (DXY) dropping 2%, indicating a lack of investor confidence.

In response, China urged the U.S. to withdraw its tariffs and warned of countermeasures to safeguard its national interests. Meanwhile, fears of a recession are growing in prediction markets. On Kalshi, the probability of a U.S. recession in 2025 has risen to 61%, while Polymarket shows a similar increase to 57%, a significant jump from 20% earlier this year.

Despite the escalating trade tensions, analysts like Kevin Capital suggest that the crypto market could be more resilient than traditional equities. While sectors linked to the SP 500 are directly affected by tariffs, crypto seems to be shielded by macroeconomic sentiment, especially regarding interest rate expectations.

With Fed funds futures now predicting five rate cuts, there is hope that monetary policy could provide a buffer for digital assets. However, this optimism is fragile—if Fed Chair Jerome Powell rules out the possibility of easing, crypto could quickly follow equities into a deeper slump.

Currently, with Bitcoin bouncing back on strong U.S. job data, the market’s attention is focused on upcoming CPI figures and Powell’s stance, which could determine the near-term trajectory of crypto.