Bitcoin: As U.S.-China trade war returns, is BTC the market’s last refuge?

• China’s 34% tariff retaliation deepens global trade tensions, impacting Bitcoin and global markets.
• Analysts see Bitcoin as a resilient hedge amid tariff-induced market turmoil and Fed rate cut hopes.

Tensions in the global economy have intensified following China’s swift response to the U.S.’s latest trade measures.

China’s tariff plans

After President Donald Trump announced sweeping reciprocal tariffs on the 2nd of April, China retaliated by imposing a 34% tariff on all U.S. imports, effective the 10th of April.

This tit-for-tat escalation adds fuel to an already heated trade war, raising concerns across multiple markets—including crypto.

Bitcoin [BTC], which had briefly climbed to $84,000, quickly slipped below $82,000 following China’s announcement.

With the European Union also signaling readiness to introduce countermeasures, market volatility could deepen, especially in the digital asset space.

Analysts remain confident about Bitcoin

However, amidst this, analyst Eric Weiss showed optimism around Bitcoin as he noted, 

“As the tariff war escalates and stocks bleed, Wall St will eventually realize there’s an alternative: Bitcoin. No earnings risk. No geopolitics. Just math. The moment capital truly pivots, BTC doesn’t just hold up, it outperforms dramatically.”

The announcement also delivered a blow to the U.S. dollar, with the Dollar Index (DXY) sliding 2%—a sign of shaken investor confidence.

In response, China swiftly called on the U.S. to withdraw its tariffs and warned of countermeasures to protect its national interests.

Polymarket bets strong on upcoming recession

That being said, recession fears are also gaining traction in prediction markets.

On Kalshi, the probability of a U.S. recession in 2025 has jumped to 61%, while Polymarket shows a similar spike to 57%, marking a notable surge from just 20% earlier this year.

Despite the escalating trade tensions, analysts like Kevin Capital suggest the crypto market may remain more resilient than traditional equities.

While sectors tied to the S&P 500 suffer directly from tariffs, crypto appears buffered by macroeconomic sentiment, particularly around interest rate expectations.

With Fed funds futures now projecting five rate cuts, optimism lingers that monetary policy could provide a cushion for digital assets.

However, Kevin warns this optimism is fragile—should Fed Chair Jerome Powell dismiss the possibility of easing, crypto could quickly follow equities into a deeper slump.

For now, with Bitcoin rebounding on strong U.S. job data, the market’s focus remains fixed on upcoming CPI figures and Powell’s stance, which could dictate crypto’s near-term trajectory.