Bitcoin (BTC) maintained strong momentum, trading above $84,000 on Wednesday, even as tensions in the US-China trade war escalated. The US government revealed a new tariff package that could impose up to 245% in total tariffs on Chinese imports, sparking global market volatility but leaving the leading cryptocurrency relatively unshaken.
US Unleashes 245% Tariffs on Chinese Imports
The White House announced a sweeping tariff response to China’s recent retaliatory moves, which included raising tariffs on US goods to 125%. In return, the US outlined a multi-tiered tariff structure that includes:
- 125% reciprocal tariffs
- 20% fentanyl-related tariffs
- Section 301 tariffs ranging from 7.5% to 100% on selected goods
This aggressive trade stance has intensified fears of a prolonged global trade war, leading to sharp losses in traditional markets. The S&P 500 dropped 2.24%, and the Nasdaq-100 fell 3.04%, highlighting investor anxiety.
Bitcoin Resilience Signals Decoupling from Traditional Markets
Despite the turmoil in equities, Bitcoin showed strong price stability, holding firm around the $84,000 level. This performance suggests that Bitcoin may be decoupling from traditional financial markets, becoming a hedge against macroeconomic uncertainty.
According to Messari analyst Dylan Bane, prolonged tariff policies could reshape global economic structures. He stated:
“Continued tariffs could catalyze structural economic change, leading to a decoupling of Bitcoin from traditional assets as it gains recognition as an independent store of value.”
Bane emphasized that ongoing disruption to global trade cooperation could undermine the US Dollar’s reserve currency status, making Bitcoin a more attractive long-term investment.
China Reportedly Selling Seized Crypto Amid Economic Slowdown
In parallel developments, China has reportedly started liquidating its seized cryptocurrency holdings, including Bitcoin, to stabilize public finances during an economic slowdown. Citing sources from Reuters, local Chinese governments are using private firms to convert these assets into fiat currency overseas.
As of December 2024, Chinese authorities were estimated to hold around 15,000 BTC, which are now being used to support local budgets and reduce economic stress. Experts have even suggested that China consider building a strategic Bitcoin reserve, similar to national stockpiles of commodities.
The Bigger Picture: Bitcoin’s Role in a Changing Economic Order
As the US-China trade war escalates and global financial systems face pressure, Bitcoin’s position as a decentralized and non-sovereign asset becomes more significant. Investors and institutions may increasingly turn to cryptocurrencies like Bitcoin as a safeguard against fiat instability, trade disputes, and geopolitical risk.
