Bitcoin (BTC) and the Wider Cryptocurrency Market Appear Relatively Unfazed As the Trade War Between the U.S. and China Escalates

As the trade war between the U.S. and China escalates, with the latter raising tariffs on the former from 84% to 125% this morning, bitcoin (BTC) and the wider cryptocurrency market appear relatively unfazed.

As the trade war between the U.S. and China escalates, with the latter raising tariffs on the former from 84% to 125% this morning, bitcoin (BTC) and the wider cryptocurrency market appear relatively unfazed.

At least compared to other assets.

Bitcoin is down a mere 0.15% over the last 24 hours, and China’s recent escalation hasn’t stopped its ongoing recovery. The cryptocurrency is now trading above $82,000. The wider crypto market, measured by the CoinDesk 20 (CD20) index, is stable with similar performance.

The same can’t be said about other assets. Gold rose to a new $3,227.5 record making Tether’s XAUT — a gold-backed cryptocurrency — the top-performing digital asset.

Meanwhile, the U.S. Dollar Index (DXY) dropped below 100 after enduring its biggest drop since 2022. At the same time, the yield on 10-year Treasuries kept rising to now stand near 4.4%.

“The question of a potential dollar confidence crisis has now been definitively answered — we are experiencing one in full force,” ING strategists, including Francesco Pesole wrote in a note reported on by The Telegraph.

Their analysis claims that the dollar usually drops when traders anticipate an increase in economic activity, but the opposite occurred this time. Instead of rising, the dollar fell sharply even as traders grew pessimistic about the economic outlook due to lower-than-expected jobs and manufacturing data.

Additionally, inflation in the U.S. actually declined at the headline level last month, which could prompt the Federal Reserve to resume cutting rates at its next meeting. Still, the market may have interpreted the lower figures as potentially waning demand, deepening the crisis.

That “confidence crisis” is seemingly seeing every asset gain against the dollar, except crypto. Bitcoin investors realized losses of up to $250 million over 6-hour windows during the recent drop, according to Glassnode, which points out that “realized losses are shrinking - suggesting early signs of seller exhaustion.” Stay alert!

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