Crypto Markets Surge as US-China Ease Tariffs
Bitcoin, Ethereum, and altcoins rally amid temporary tariff cuts and easing geopolitical tensions.
The cryptocurrency market rallied on Monday, May 12, following a breakthrough agreement between the United States and China to temporarily reduce tariffs, signaling a possible cooling in what has been a tense trade standoff. The deal, announced via a joint statement in Geneva, gives both countries a 90-day window to negotiate broader economic cooperation.
Under the terms of the agreement, the U.S. will lower tariffs on Chinese imports from 145% to 30%, while China will cut its duties on American goods from 125% to 10%. This move marks the first significant step toward de-escalation since steep tariffs were reinstated in early April.
Bitcoin, Ethereum, and Altcoins Climb
Crypto markets responded swiftly to the announcement, with top assets posting strong daily and weekly gains:
- Bitcoin (BTC) rose to $105,322, up 1.62% in 24 hours and 11.35% over the past week.
- Ethereum (ETH) followed, gaining 3.13% on the day to $2,560, with a weekly increase exceeding 40%.
- Dogecoin (DOGE) led altcoin advances, jumping 6.29% daily and a staggering 42.5% for the week.
The total cryptocurrency market capitalization reached $3.38 trillion, up 2% on the day, as sentiment turned bullish. The Crypto Fear & Greed Index registered a score of 73, firmly in the “Greed” range, reflecting investor optimism.
Global Markets Rebound on Trade Optimism
Beyond crypto, traditional financial markets also reacted positively to the tariff relief:
- The Hang Seng Index climbed 2.7%.
- The Hang Seng Tech Index jumped 4.5%, fully reversing losses from the April 2 tariff escalation.
- The Bloomberg Dollar Spot Index increased 0.3%, with the U.S. dollar strengthening against both the euro and yen.
However, not all sectors embraced the rally equally. Southbound investors—mainland Chinese participants in Hong Kong markets—were seen locking in gains, with nearly HK$13 billion in outflows reported. Still, crypto traders remained active, with BTC and ETH trading volumes exceeding $70 billion combined.
A Temporary Truce With Long-Term Implications?
Although the tariff cuts are temporary, the agreement is being viewed by market watchers as a potential turning point in U.S.-China relations. Tensions had escalated in early April when President Donald Trump reinstated aggressive tariff measures. Monday’s announcement is the first meaningful move toward easing hostilities.
Market analysts suggest that if the 90-day negotiation period leads to a more permanent trade agreement, both equities and digital assets could see sustained upside.
Trump Sees Crypto as a Strategic Asset
As the trade dispute unfolds, President Trump has emphasized the importance of keeping the crypto sector under U.S. influence. Speaking on Sunday evening upon his return to the White House from Palm Beach, Florida, he reiterated his support for cryptocurrency from a geopolitical perspective.
“I’m a big fan of crypto because I want to keep it away from China,” Trump said.
He acknowledged crypto’s relatively recent emergence, calling it “a whole new thing that started, you know not so long ago,” and pointed to its growing importance amid rising competition with China in sectors like artificial intelligence and blockchain technology.
Trump warned that unless the U.S. acts decisively, China’s influence could extend into the digital asset space—an area he views as critical for maintaining American technological leadership.
Conclusion: Crypto Gains Ground as Global Tensions Ease
The sharp rally in digital assets on the back of easing U.S.-China trade tensions highlights the crypto market’s sensitivity to geopolitical shifts. With the 90-day tariff truce now in place, investors are watching closely to see if negotiations yield lasting cooperation—or simply delay further conflict.
As Bitcoin, Ethereum, and altcoins gain momentum, the next phase of U.S.-China talks could define the trajectory of both global markets and the future of decentralized finance.
