US China Trade Thaw Lifts Crypto Sentiment as Tariff Risk Cools

Markets did not need a signed treaty. They needed daylight. After weeks of tense signaling, US Treasury Secretary Scott Bessent said Washington and Beijing have reached a “very substantial” trade framework that would make the threatened 100% tariff surge unnecessary.

“President Trump gave me a great deal of negotiating leverage with the threat of 100% tariffs on November 1, and I believe we have reached a very substantial framework that will avoid that,” he said.

The line landed before a planned Oct. 31 meeting between the two leaders, and risk assets exhaled.

Why crypto cares when tariffs step back

Crypto reacted first, then weighed the why. Relief rallies begin when the risk premium shrinks. If those tariffs do not hit, supply chain pressure eases, margins look better, and global liquidity can stop flinching. That tends to help anything tied to growth and sentiment. Bitcoin ticked higher. Ether and Solana followed. The move was not explosive, but it was clean enough to change the tone on the day.

Framework versus finished deal

The path forward still hinges on details. A framework is not a final agreement. It buys time and creates a runway for negotiators. Traders know this dance. Headlines lead. Term sheets lag. If the October 31 session produces concrete tariff de escalation, the market can graduate from relief to trend. If talks stall, the tape will fade as quickly as it perked up.

What credible voices are saying

There was no shortage of commentary. Bitwise adviser Jeff Park argued that a de escalation would be a tailwind for both Bitcoin and gold, pointing to the way macro uncertainty has dominated positioning. Investor Anthony Pompliano put it plainly.

“Asset prices will get crazy this week if the US China trade deal is announced and the Fed cuts interest rates. Buckle up,” he said.

Traders heard the message, even if they kept a dose of caution.

The macro checklist to watch next

Start with rates. If front end yields slip on lower growth risk and the odds of an insurance cut rise, the dollar usually softens. A softer dollar can support crypto in the short run by lifting global risk appetite. Watch liquidity as well. If volatility cools and basis normalizes, market makers can warehouse more inventory and spreads tend to tighten. That helps price discovery when headlines fly.

Flows, funding, and positioning tell the truth

Exchange traded products have acted like a weather vane all year. Sustained net creations on calmer macro days hint at durable interest. Persistent redemptions after pops signal fading conviction. If the framework becomes policy, inflows could stabilize and set a floor under choppy sessions. If not, expect another round of whipsaws.

Positioning is the final piece. Funding rates and open interest show whether leverage is getting loud again. An orderly grind higher with flat to slightly positive funding is healthier than a vertical squeeze. If perpetual funding spikes while spot lags, it is usually a warning that the move needs fresh cash, not just fast money.

Bottom line for readers

A credible pause in tariff escalation removes a thorn from the macro narrative and gives crypto room to trade on its own fundamentals again. It is not a green light to forget risk. It is a chance to reset, reassess entries, and let data lead rather than fear.

Frequently asked questions

Did crypto prices jump on the headline
Yes. Bitcoin, Ether, and Solana posted modest gains after the Bessent comments, reflecting improved risk appetite.

Is a framework the same as a deal
No. It signals intent and scope. Formal terms still need to be agreed, announced, and implemented.

What should crypto traders watch next
Policy signals around tariffs, front-end rate expectations, ETF fund flows, and funding rates on major perpetuals.

Glossary

Framework
A negotiated outline that sets the direction for a final agreement without binding terms yet.

Funding rate
A periodic payment between perpetual futures longs and shorts that keeps futures near spot. It reveals leverage bias.

Open interest
The total value of outstanding futures and options contracts. Rising open interest with rising price can show fresh participation.

Risk premium
Extra return investors demand to hold risk assets when uncertainty rises. It widens during tariff scares and narrows on de escalation.

ETF flows
Net creations or redemptions in exchange traded crypto products that indicate directional demand over days and weeks.