Cryptocurrency and stocks enter a ‘new chapter in trade conflict’ amid escalating US-China tensions.

Cryptocurrency and equity markets have entered a “new phase” of the trade war, amid ongoing tariff escalations between the United States and China. Concerns regarding global trade intensified on April 15 after the White House announced that Chinese imports would face tariffs of up to 245%. The penalties consist of a “125% reciprocal tariff, a 20% tariff to address the fentanyl crisis, and Section 301 tariffs on specific goods, ranging from 7.5% to 100%,” as reported by the White House.

According to Aurelie Barthere, principal research analyst at the crypto intelligence platform Nansen, “We are now in a new phase of the trade war, focusing on high-added-value sectors, including tech and pharmaceuticals, with attention aimed at US-China relations.” Barthere added, “Until and if we see a resolution of the US-China conflict, with one leader making concessions to the other, we will face highly correlated risk assets.” She also noted that this situation is detrimental for non-US equities. Since November 2024, US equities and cryptocurrency have been “highly correlated,” which has intensified during the current market correction as investors moved to de-risk, particularly with expensive assets.

The recovery of global equities and cryptocurrency markets is dependent on the tone of tariff negotiations, with analysts from Nansen predicting a 70% chance of a market bottom by June 2025 before recovery begins. Recently, China appointed a new chief trade negotiator, Li Chenggang, a former assistant commerce minister during former President Donald Trump’s administration. Chenggang is noted as a “very intense” negotiator with experience in dealing with US officials, as reported by Reuters on April 16.

As tariff tensions escalate alongside inflation concerns, attention now turns to US Federal Reserve Chair Jerome Powell’s forthcoming speech during the next Federal Open Market Committee (FOMC) meeting on May 6. Analysts from Bitfinex describe that “markets are on edge for any signal that the Fed might delay rate cuts due to persistent inflation or increased geopolitical risk.” They added that if Powell takes a hawkish stance, risk assets like Bitcoin could face downward pressure. Conversely, a neutral tone may bring some calm to the markets, especially as there have been significant recoveries across many risk assets, particularly cryptocurrencies, where lower market cap assets have surged 30–40% from their lows.

“Crypto reacts to macro news not because fundamentals have shifted, but due to thin positioning and sensitive confidence,” the analysts explained.