Trump, China, And Crypto : The Market’s Next Big Shockwave

The economic clash between the United States and China takes on a new dimension. Indeed, far from being limited to traditional exchanges, this trade war now affects the crypto market. Thus, between Donald Trump’s announcement regarding the creation of a national strategic crypto reserve and the Chinese response to U.S. economic sanctions, investors are witnessing market movements of rare intensity. The question now arises: is this instability temporary or should we expect a lasting impact?

Cryptos on edge after Trump’s announcement

Donald Trump surprised the financial world by revealing his national crypto reserve project. Bitcoin, Ethereum, XRP, Solana and Cardano were placed at the heart of this new strategy, marking an unprecedented shift in U.S. economic policy. Thus, the stated goal is to strengthen the digital sovereignty of the United States in a context of increased rivalry with China and to anticipate a shift in financial exchanges towards cryptos.

The announcement immediately sent the markets soaring. That’s why Bitcoin reached $95,000 before stabilizing around $89,870. Also, Cardano and XRP also experienced a significant rise in a widespread bullish dynamic. However, the euphoria was short-lived. The U.S. commercial offensive against China quickly prompted a response, which abruptly reversed the trend and caused cryptos to plummet within hours.

A trade war that threatens financial stability

On March 4, Washington decided to intensify economic pressure by raising tariffs on several fronts. Additionally, Canadian and Mexican imports are now taxed at 25 %, while Chinese products are facing a tax increase from 10 % to 20 %. Officially, this measure aims to combat fentanyl trafficking, but Beijing sees it as a hostile maneuver and has reacted promptly.

In response, China has imposed a 15 % tax on several American agricultural products , which include wheat, corn, cotton, and chicken. Furthermore, the Chinese government has approached the World Trade Organization, denouncing an infringement on international trade rules. This standoff has caused a shockwave through the financial markets, resulting in a sharp decline in stock indices. The S&P 500 lost 3 %, while the NASDAQ fell by 2.64 %.

These cryptos followed this downward trend with a marked correction. Bitcoin dropped by 8.25 %, Ethereum declined by 10.62 %, Cardano lost 15.9 %, and Solana saw a decrease of 14.6%. This episode illustrates how vulnerable the crypto market remains to geopolitical tensions and macroeconomic decisions.

Why are cryptos affected by this crisis?

Long perceived as an asset independent of traditional markets, Bitcoin today is heavily influenced by the dynamics of institutional investors. The entry of large investment funds has made the sector more sensitive to global economic fluctuations. When a crisis erupts, these players reduce their exposure to risky assets, leading to massive crypto sell-offs.

However, the monetary instability linked to the trade war also encourages investors to turn to traditional safe havens, like gold, to the detriment of Bitcoin and altcoins. Moreover, Trump’s initiative raises questions about the future of crypto market regulation. The increasing institutionalization of cryptos could strengthen the control of U.S. authorities, to the detriment of independent actors and retail investors.

If this crisis generates an immediate correction, some analysts believe it might ultimately create buying opportunities. Arthur Hayes, former CEO of BitMex, considers that this decline could be a strategic lever for Donald Trump to force the Federal Reserve to adopt a more accommodative monetary policy. According to him, a drop in Bitcoin towards $70,000 would not be a threat, but an accumulation opportunity before a new bullish cycle. The coming months will be crucial for the crypto market. Such uncertainty surrounding U.S. economic policy and the Chinese response will continue to influence trends. It remains to be seen whether cryptos will regain their status as a safe haven in the face of these upheavals, or whether they will remain trapped in geopolitical and economic tensions.