Bitcoin (BTC) Price Reaction to a US-China Trade Deal Could Reveal Its Safe-Haven Status

Bitcoin's potential price reaction to a trade deal between the United States and China could give insights into whether Bitcoin is being used as a safe-haven asset in the current market. By Cointelegraph

Bitcoin (BTC) could react brightly to any potential price moves in the wake of a trade deal between the United States and China, which could give clues as to whether the crypto is being used as a safe-haven asset.

Bitcoin price chart 7D. Source: TradingView

Crypto trader "Daan Crypto" noted on May 11 how Bitcoin has outperformed stocks and held up “incredibly strong” during a sharp sell-off on stock markets in April, following Donald Trump’s announcement of tariffs on “Liberation Day.”

Following its plunge to $75,000 on April 7, Bitcoin recovered sharply to trade 27% higher at around $95,000 by the time of writing, while indexes like the S&P 500 and Nasdaq went down in April.

At the time, people were speculating if Bitcoin’s relative strength came from the narrative that countries were using Bitcoin to bypass tariffs, but the analyst said the opposite should theoretically happen if the trade deal is confirmed.

Bitcoin performance since Trump's "Liberation Day" tariff announcement. Source: Daan Crypto

On May 11, the White House announced that talks between the U.S. and China regarding a trade deal have made “substantial progress.” However, no official agreement had been announced yet.

“We will be giving details tomorrow, but I can tell you that the talks were productive and we are going to be making an announcement tomorrow,” said U.S. Treasury Secretary Scott Bessent.

However, if Bitcoin keeps doing its thing and outperforming, “it’s safe to assume that tariffs likely have little direct impact on how BTC is treated or used,” Daan concluded.

Markets await trade deal announcement

Some analysts, however, believe that Bitcoin will likely jump if a trade deal comes through, along with potential rate cuts.

“We believe that institutional investors are less apprehensive about investing in Bitcoin and crypto as US-China trade talks come to a conclusion and the likelihood of rate cuts increases,” Jeff Mei, chief operations officer at BTSE, told Cointelegraph.

Meanwhile, Jupiter Zheng, researcher at HashKey Capital, added, “A US-China trade deal could signal stability in global markets, potentially driving investors to seek growth opportunities and capitalise on new trends, which could lead to increased capital flows into alternative assets like Bitcoin.”

Analyst Will Clemente said on X that only a good announcement of a trade deal is likely to keep momentum going.

"Feels like you’re gonna need a real, tangible announcement on the China front to keep things moving here locally, momentum starting to stall out on BTC for the first time in a bit."