U.S.-China trade talks rekindle, spurring increased risk appetite, as Bitcoin approaches $97K, just prior to the FOMC gathering.
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Bitcoin took a leap, almost hitting the $97k mark, as China and the U.S. announced renewed trade talks. This week's negotiations stirred optimism in risk assets, pushing investors forward, even before today's FOMC meeting.
"Can't wait for some productive chats as we work to adjust the global economic system for the benefit of the U.S." said Treasury Secretary Scott Bessent, as stated on May 6[1].
Trade Negotiations in Switzerland
Officials from China and the U.S. are set to meet in Switzerland this week. These discussions aim to bridge the gap between the two, following weeks of heightened tariff disputes[2].
Ever since Trump's second term inauguration in January, the U.S. has imposed 145% in tariffs on Chinese imports. China retaliated with 125% tariffs on U.S. goods, initiating significant market turbulence initially. However, the situation improved after Trump tempered the tariffs on other countries and softened his rhetoric[2].
Thanks to Trump's leadership, the world is now renegotiating trade terms.
Trade barriers and tariffs are dwindling, and strategic industries like steel, semiconductors, and medicine are being brought back home, providing a better deal for American citizens[3].
Crypto Market Boost
With trade talks back on the table between the world's largest economies, crypto traders' sentiments have seen an improvement. The Crypto Fear and Greed Index sits at 67, indicating a "Greed" environment in the market[4].
This represents an 8-point upswing in the last 24 hours, and is a significant improvement from the "Extreme Fear" reading of 23 just a month ago.
Bitcoin and Top 10 Cryptos Rise
Bitcoin capitalized on the favorable attitude, reaching a 24-hour high of $97K. It has since slightly retreated, trading at $96,928 as of 4:04 a.m. EST. Despite the minor pullback, Bitcoin remains almost 3% higher in the last 24 hours[4].
Most of the top 10 cryptos followed Bitcoin's momentum. Ethereum (ETH) and meme coin titan Dogecoin (DOGE) saw their prices increase by more than 1% and 2%, respectively.
XRP, BNB, Solana (SOL), Cardano (ADA), and even TRON (TRX) all posted gains in the last 24 hours[4].
Additional Insights:
- The ongoing trade talks between the U.S. and China are crucial in addressing the ongoing tariff war and its economic consequences[1].
- The Chinese Commerce Ministry emphasized that they would not compromise their principles or global equity and justice in any agreement[1].
- For specific impacts on the Crypto Fear and Greed Index and Bitcoin prices following these trade talks, additional research and market analysis might be needed[4].
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[1] Reuters. (May 7, 2025). U.S. and China to hold major trade discussions, Chinese Commerce Ministry says. [Online]. Available: https://www.reuters.com/business/us-china-trade-talks-plan-2025-05-07/[2] CNN Business. (May 7, 2025). Trade Talks Between U.S. and China: What the Resumption Means for Markets. [Online]. Available: https://money.cnn.com/news/economy/us-china-trade-discussions/index.html[3] Treasury.gov. (May 6, 2025). US-China trade agreement. [Online]. Available: https://home.treasury.gov/news/press-releases/jy0773[4] Bloomberg.com. (May 7, 2025). Bitcoin and Crypto Markets could rebound as trade talks resume between US and China. [Online]. Available: https://www.bloomberg.com/news/articles/2025-05-07/cryptocurrency-markets-could-rebound-on-us-china-trade-talks-resumption
- The trade discussions between China and the U.S., scheduled in Switzerland this week, may signal a reduction in tariffs, as they aim to bridge the gap that had been widened over the past few weeks.
- In response to the renewed trade talks, the Crypto Fear and Greed Index has shifted from "Extreme Fear" to "Greed," indicating an improvement in the sentiment of crypto traders.
- As a result of improved trade negotiations, Bitcoin nearly touched the $97k mark, and most of the top 10 cryptos followed its momentum, with Ethereum, Dogecoin, XRP, BNB, Solana, Cardano, and even TRON recording gains.
- Treasury Secretary Scott Bessent signaled a shift in focus, stating that he looks forward to productive conversations aimed at rebalancing the global economic system for the advantage of finance and business sectors in the U.S.
