1. Risk Aversion and the 'Substitutive Nature' of Crypto Assets
Increased Volatility in Traditional Markets: The US-China tariff dispute may lead to heightened volatility in global stock markets, commodities, and other traditional assets. Some investors may view crypto assets (like Bitcoin) as 'digital gold' and a hedge option, pushing prices higher in the short term.
But caution is required: The high volatility of cryptocurrencies makes them not a stable safe-haven asset. If trade wars trigger systemic risks (like economic recession), investors may sell high-risk assets (including cryptocurrencies) for liquidity, leading to price declines.
2. Dollar Trends and Capital Flows
Impact of Dollar Strength: If trade disputes increase demand for the dollar as a safe-haven currency, a stronger dollar may suppress the prices of cryptocurrencies priced in dollars (due to increased costs for holders of other currencies). Conversely, a weaker dollar may benefit the crypto market.
Cross-Border Capital Flows: If China strengthens capital controls in response to trade pressures, some funds may be transferred across borders via cryptocurrencies, boosting demand in the short term. For example, during the renminbi depreciation in 2015, Bitcoin's premium in China significantly increased.
3. Potential Changes in Policy Regulation
Spillover Effects of US-China Technological Competition:
United States: May accelerate the development of a central bank digital currency (CBDC) or stablecoin regulatory framework to maintain dominance in fintech, indirectly affecting the structure of the crypto market.
China: Continuing to promote the digital renminbi (DCEP) may further restrict private cryptocurrency trading (such as banning exchanges and mining), leading to short-term market selling pressure.
Global Regulatory Coordination: If trade disputes prompt cooperation between the US and China in the fintech sector, it may create a stricter international regulatory consensus, curbing speculation in the crypto market.
4. Macroeconomic and Inflation Expectations
Rising Supply Chain Costs: Tariffs increase commodity prices, exacerbating global inflation. If the market perceives Bitcoin as having anti-inflation properties (similar to gold), it may attract capital inflows.
Monetary Policy Linkage: If inflation forces the Federal Reserve to raise interest rates, risk assets (including cryptocurrencies) may come under pressure, offsetting some of the price increases driven by safe-haven demand.
5. Industry-Specific Impacts
Geographical Shift in Mining Industry: If China further restricts energy-intensive industries (like Bitcoin mining) due to trade disputes, mining power may continue to shift to North America and other regions, affecting network stability and miner selling behavior.
Application of Blockchain Technology: The competition between the US and China in trade digitization (such as cross-border payments and supply chain management) may promote the adoption of blockchain technology, indirectly benefiting related tokens (like supply chain tokens).
6. Historical Cases and Market Reactions
During the Peak of the Trade War from 2018 to 2019: Bitcoin prices showed some correlation with US stocks, but did not exhibit clear safe-haven properties, being more driven by its own market cycles.
2020 Pandemic and Trade Tensions Combined: Bitcoin initially plummeted due to a liquidity crisis, then rebounded amid the Federal Reserve's easing, indicating its significant susceptibility to macro liquidity.
Summary: Uncertainty under Multiple Pathways
The impact of the US-China tariff dispute on the crypto market is not one-dimensional and requires analysis of the following scenarios:
Short Term: Risk aversion may drive prices up, but caution is needed regarding potential sell-offs triggered by liquidity crises.
Medium Term: The trajectory of the dollar, inflation expectations, and policy regulation are key variables.
Long Term: The strategic competition between the US and China in digital currencies and blockchain may reshape the underlying logic of the crypto market.
Investor Response Strategy: Focus on the progress of trade negotiations, Federal Reserve policy trends, and US-China regulatory dynamics, diversify risks, and be wary of market overreactions. The crypto market is still in a high-volatility phase, requiring careful assessment of its changing correlations with traditional assets.
