(STL.News) The two countries, with the biggest economies in the world, have finally come to a somewhat mutually beneficial agreement after months of significantly detrimental fighting over trade rules. The deal reached is sure to affect global trade and, in turn, is likely to have significant ripple effects across the cryptocurrency markets.
Understanding the Role of Crypto in the US
Cryptocurrency is a highly popular mode of finance in the United States, with an estimated 28% of adults owning at least one form of the digital assets. Even before the start of his current presidency, Donald Trump had remained enthusiastic about crypto adoption in the country, even promising to make the US the ‘crypto capital of the globe.’
This mode is popular for a variety of different reasons. Firstly, as an encrypted asset, it is known for its complex security features. It is also decentralized and universal, enabling fast, low-cost transactions. Most significantly, however, crypto is a speculative asset and is often highly volatile, meaning its value can rise or fall over time for various reasons. One of these factors includes, as this article will explore, political and global events.
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The Meeting Between the US and China
US President Donald Trump met with Chinese President Xi Jinping on October 30, 2025. At the Asia-Pacific Economic Cooperation (APEC) Summit in Busan, South Korea, the two world leaders finalized a one-year trade deal. Above all, the agreement has led to the suspension of multiple major tariffs and export restrictions that were negatively affecting both countries.
Why This Deal was Necessary
The deal between the US and China couldn’t have come sooner, as the continuously escalating tensions caused one of the biggest crypto crashes in history. The crash occurred on October 11 and saw the overall crypto market value drop by $19 billion in a single day. Despite the significant de-escalation between the two countries, it seems crypto markets are responding with, perhaps warranted, caution.
Understanding the Trade Deal
Multiple outcomes arose from the Trade deal, with some benefiting the US and others China. Firstly, China previously implemented new export controls on rare materials essential to the manufacture of military equipment, smartphones, and electric vehicles, but has now lifted them. They have also agreed to halt all shipments of fentanyl precursors to the US for one year, as well as lift the various retaliatory tariffs they had imposed on the US after March 4, 2025. The country also promised to purchase at least 12 million metric tonnes of soybeans grown on US land, which is certain to help farmers earn higher profits, especially after the recent trade tensions.
In return, Donald Trump promised to reduce the tariffs he had previously imposed on China by 10%. This is set to begin on November 10, 2025, and span the duration of the year-long deal. Alongside this, the deal will extend various key tariff exceptions and suspend specific trade actions related to maritime and shipping investigations.
The Effect of Previous Tensions on Cryptocurrency
The deal has certainly come as a relief for crypto enthusiasts, even if they haven’t rushed to invest and trade. The fighting had a catastrophic effect on the crypto market, with the worst of it beginning on October 9. On this day, China announced various strict licensing requirements for exporting rare minerals, and in retaliation, Trump threatened a 100% tariff on all Chinese imports the next day.
When this news was made public, faith in cryptocurrency dropped exponentially, and so did its value. This became the biggest liquidation event in crypto history. Over 1.6 million crypto traders lost positions that were worth between $19 billion and £30 billion in a single day. Bitcoin’s value dropped by over $20,000, and Ethereum dropped by 14%.
The Future of Cryptocurrency
Despite the objectively good news of the deal, crypto traders remain cautious. This is likely because many of the details surrounding the agreement remain unclear, and there is persistent concern that the meeting has created a temporary ceasefire rather than a permanent solution.
However, it can’t be denied that the deal has had and will continue to have a positive effect on the crypto market. Cryptocurrency experts are cautiously optimistic about the future of crypto after this deal and believe it will help remove the uncertainty that has kept crypto’s value so low. Now that the political headlines are less shocking and negative, it is likely the crypto market will begin to recover. Crypto investors once again have the opportunity to trade and invest without an overwhelming fear of sudden geopolitical shock.
Conclusion
The US and China have agreed to review this deal annually. In the meantime, the sudden shift from chaos to relative stability will give the crypto market the chance to recover. That said, crypto investors will likely remain cautious for a while, and it may take a significant amount of time for the market to return to where it was before the $19 billion liquidation event. The crypto fear and greed index might not still be in the extreme fear level of 18 that it was, but it remains in the fear level. That being said, there is still hope for a full recovery. For it to happen, however, crypto investors will need to see consistent implementation of the deal over a sustained period.
