Bitcoin’s Rally Pauses Amid U.S.-China Trade Tensions; Yuan Depreciation May Signal Future Gains

Bitcoin (BTC) experienced a temporary surge to $80,000 before retracting to $76,500, stabilizing just below $78,000. This 1.2% decline over the past 24 hours mirrors broader market trends, with Ether (ETH) dropping nearly 4% to below $1,500. The CoinDesk 20 index, representing the top 20 cryptocurrencies by market capitalization (excluding stablecoins, memecoins, and exchange tokens), also saw a 2.2% decrease.

Market Impact of New Tariffs

The downturn aligns with the White House’s announcement of an additional 104% tariff on Chinese goods, set to take effect at midnight. This development has influenced both traditional and crypto markets, with the S&P 500 and Nasdaq reversing earlier gains to close down 0.5% and 0.7%, respectively. Crypto-related equities were notably affected; Bitcoin mining company Bitdeer (BTDR) led losses with an 8.7% drop, while Strategy (MSTR) and Coinbase (COIN) declined by 5.3% and 2.3%, respectively.

Yuan Devaluation as a Potential Catalyst

Concurrently, the offshore Chinese yuan (CNH) depreciated to 7.4 against the U.S. dollar, its weakest level in years. Analysts suggest that Beijing might allow further weakening of the yuan to enhance export competitiveness. Historically, such devaluations have led to capital flight from China, with Bitcoin often serving as a destination for these outflows. Arthur Hayes, co-founder of BitMEX, noted, “It worked in 2013, 2015, and can work in 2025.”

Navigating Market Uncertainty

Kirill Kretov of CoinPanel highlighted the current phase of heightened uncertainty, citing ongoing trade disputes, geopolitical tensions, and fears of a global economic slowdown. He emphasized that shallow liquidity in both crypto and traditional markets could exacerbate volatility, suggesting that a strong directional trend may not emerge until more participants adjust to the evolving environment. ​

As the situation develops, market participants should closely monitor geopolitical events and currency fluctuations, as these factors could significantly influence Bitcoin’s trajectory in the coming weeks.