Bitcoin Rallies Amid U.S.-China Trade War Tensions

Bitcoin's Resilience Amid Trade Tensions

Bitcoin demonstrated remarkable resilience on Friday, surging 5.3% to $83,832.7 by 3:43 p.m. ET, despite heightened concerns over the U.S.-China trade war. The rally offset earlier losses triggered by President Donald Trump’s fluctuating stance on tariffs, which had initially sent Bitcoin plummeting to $74,000.

Volatile Week for Bitcoin

The cryptocurrency experienced a rollercoaster week as trade tensions escalated. Trump’s decision to postpone higher tariffs provided temporary relief, but the exclusion of China from this extension led to a sharp escalation. China retaliated with 84% tariffs on U.S. goods, intensifying fears of economic fallout. Bitcoin’s movements closely mirrored U.S. stocks, particularly the Nasdaq, raising questions about its role as a safe haven.

Broader Market Impact

Risk-driven markets, including equities, saw significant sell-offs, with Bitcoin moving in tandem. Traditional safe havens like gold and the Japanese yen outperformed, while Bitcoin faced additional pressure from corporate disclosures. MicroStrategy revealed a $5.9 billion unrealized loss on its digital asset holdings, further denting confidence.

Spot Bitcoin ETFs See Outflows

U.S.-listed spot Bitcoin ETFs recorded their sixth consecutive day of outflows, with net redemptions totaling $149.6 million. Fidelity’s FBTC and Grayscale’s GBTC led the decline, while Grayscale’s Mini Bitcoin Trust was the sole fund to attract inflows, gaining $9.87 million. Cumulative outflows over six days reached $877 million.

Altcoins Follow Bitcoin's Lead

The broader crypto market mirrored Bitcoin’s recovery, with Ether rising 3.3% to $1,565.79 and XRP climbing 4% to above $2. Altcoins like Cardano, Solana, and Polygon also saw gains, while meme tokens like Dogecoin added 3.7%. The crypto market’s performance underscored its sensitivity to macroeconomic shifts and risk sentiment.