Gushiken Yona
As the U.S. and China lock horns in a deepening trade war, the crypto bull run teeters on uncertain ground. An investment expert warns that intensifying geopolitical tensions could keep markets volatile and push the peak of this cycle far beyond what investors expect.
Crypto Bull Run Threatened by Global Tensions
The crypto bull run, already navigating a complex macroeconomic climate, now faces fresh headwinds from an escalating trade standoff between the world’s two largest economies. Min Xue, investment partner at Foresight Ventures, believes this isn’t a temporary scuffle—it’s a long-haul fight.
“This fight will drag on,” said Xue in a statement shared with The Shib Daily, warning of “high volatility for both US equities and crypto over the next six months.” His take? The delayed resolution and retaliatory actions from both sides are likely to hold back momentum in high-risk asset classes, including crypto.
How the US-China Conflict Could Delay the Crypto Bull Run Peak
This prolonged uncertainty led Xue to a specific forecast regarding the current cycle: “The bull market peak for crypto? Likely later than Q3.” Why the delay?
Xue pointed out that “The Trump team overestimates what tariffs can achieve—bringing manufacturing back isn’t a 1-2 year fix.” Meanwhile, Beijing appears ready for a prolonged standoff. According to Xue, “China’s been prepping since his first term: diversifying trade partners (EU, MENA, SEAsia, LATAM) & doubling down on homegrown tech (DeepSeek, Huawei).”
This preparation signals Beijing is not only ready to retaliate but potentially to escalate beyond previous measures. “China will hit back harder this time,” Xue asserted. He applies a strategic lens: “Game theory 101: if you know the other side might flip later, you go max tough upfront.” With both economic giants digging in, investors should “brace for serious market swings.”
Adding another layer of complexity for risk assets, “with inflation still hot, don’t count on the Fed to slash rates anytime soon,” Xue added, removing a potential major fuel source for crypto rallies.
Beyond Tariffs: Escalation Tactics Emerge
Recent developments confirm this isn’t just about tariffs on goods anymore. Reports indicate China is broadening its retaliation strategy, increasingly targeting the U.S. services sector – including legal, consulting, travel, and education – where America traditionally holds a surplus. This shift is accompanied by a series of non-tariff measures designed to inflict pain and gain leverage.
Examples include:
- Targeting Key Exporters: Beijing reportedly ordered Chinese airlines to halt deliveries of Boeing jets, striking at America’s largest exporter.
- Restricting Critical Resources: China tightened export controls on rare-earth minerals vital for semiconductors, defense systems, and green technology.
- Applying Direct Pressure: U.S. firms like PVH (parent of Tommy Hilfiger) and gene-sequencing company Illumina were added to an “unreliable entity” list, restricting their business in China.
- Undermining U.S. Tech: Chinese authorities issued notices for individuals allegedly involved in cyberattacks on behalf of the NSA, while state media encouraged replacing American technology with domestic alternatives.
What This Means for Crypto Investors
The intensifying US-China conflict creates a challenging macroeconomic backdrop for cryptocurrencies. Prolonged geopolitical tension and the resulting market volatility typically lead investors to reduce exposure to riskier assets. While crypto has unique drivers, it remains highly sensitive to global liquidity conditions and overall market sentiment, both of which are negatively impacted by such large-scale economic conflict.
As Min Xue suggested, with both sides seemingly prepared for a protracted struggle and central banks constrained by inflation, the path forward for crypto markets in the coming months could be choppy. Investors may need to adjust their timelines and brace for continued volatility as this geopolitical drama unfolds.
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Yona has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Daily is an official media and publication of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
