🇺🇸🇨🇳 US–China Trade War: Effect on Bitcoin
📈 1. Bitcoin as a “Safe-Haven” Asset
During trade war escalations (2018–2020), traditional markets (stocks, yuan, etc.) saw volatility.
Many investors viewed Bitcoin as a hedge against economic uncertainty, like gold.
Bitcoin’s price often surged during periods of intense trade war news — as people looked for alternative stores of value, especially in China where capital controls limit other options.
Example:
In August 2019, when China devalued the yuan amid trade tensions, Bitcoin briefly rallied over 7%.
🌏 2. Yuan Devaluation and Bitcoin Demand
China’s currency (CNY) came under pressure during the trade war.
As the yuan weakened, some Chinese investors moved capital into Bitcoin to preserve value and escape restrictions.
Since Bitcoin is borderless, it gave Chinese holders a discreet way to diversify their wealth.
🔌 3. Mining Shifts & Regulatory Crackdowns
China historically dominated Bitcoin mining. Trade tensions, along with US pressure on Chinese tech firms, intensified scrutiny of crypto mining.
In 2021 (though after the peak of the trade war), China banned crypto mining, partially influenced by international tensions and capital flight concerns.
This led to a massive shift in mining operations to countries like the US, Kazakhstan, and Canada.
💵 4. US Dollar Strength & Bitcoin Correlation
Trade wars tend to strengthen the US dollar as a global reserve asset.
A strong dollar can sometimes weaken Bitcoin’s price relative to USD, though this effect varies depending on broader market sentiment.
📊 5. Market Volatility & Speculation
Uncertainty during trade negotiations often drove increased Bitcoin trading volume and speculation.
Exchanges saw spikes in activity during tariff announcements, retaliatory moves, and currency interventions.
