The easing of tensions between China and the US is proving extremely supportive for the cryptocurrency markets. According to the latest report from the Wall Street Journal, necessary steps are being taken to appease risk markets. This paves the way for further rallies, potentially whetting appetites ahead of the Federal Reserve’s interest rate decision and the anticipated Trump-Xi meeting.
US-China Tension
Ahead of their meeting, Trump and Xi have already taken significant actions. Updates about last week’s negotiations led by the US Treasury Secretary were previously shared. The eagerly anticipated announcement of an agreement came before the major meeting scheduled for Thursday, with today’s leaks suggesting more positive news may follow.
Firstly, preparations are underway for discussions on the US tariffs applied to China concerning fentanyl restrictions. Additionally, efforts to balance increasing port fees between the two countries are ongoing. Sources close to the negotiations indicate that some customs duties might be withdrawn by the US.
In the initial phase, the previously set 20% additional US tariff will be reduced to 10%. In return, China is expected to impose stricter limitations on the export of chemicals used in the production of synthetic opioid fentanyl.
Surge in Cryptocurrencies
The worst-case scenario for November 1 was the escalation of the US tariffs on China to 155% and the implementation of additional export restrictions. There were fears that China might reciprocate, severing trade between the two nations. However, recent developments suggest that current 55% tariffs will be lowered to 45%.
One of Trump’s objectives is to align the tariff imposed on China closer to the 40% level applied to other Asian countries, reducing the appeal of indirect sales through second countries. China, on its part, needs to postpone new rare earth restrictions for a year. Bessent noted this might be feasible, hinting at a review of the current stance. This implies the possibility of a new one-year agreement between China and the US instead of a three-month one, providing a faster uplift in cryptocurrency values due to reduced short- and medium-term pressure.
A one-year period would also offer China and the US the chance to negotiate a more permanent agreement. Such a long-term announcement is likely to significantly increase risk appetite.
BTC is maintaining its position at 115,000 dollars and is aiming for 116,000 dollars, influenced by these developments.
