With China threatening strong retaliation against Trumpโs tariff demands, Bitcoin might be primed for a breakout, following its history of thriving amid geopolitical turmoil.
Geopolitical tensions seem to be drawing attention back to Bitcoin (BTC), with Matrixport forecasting a potential rally like in 2015, when the yuanโs devaluation triggered a sell-off before BTC rebounded by the end of the year.
In a recent research report on X, the analysts at the Singapore-based blockchain firm pointed out that the USD/CNY exchange rate is nearing key resistance levels, which could trigger a Bitcoin breakout as the yuan faces increasing pressure.
Despite short-term concerns over U.S. Treasury yields, the analysts still appear to be optimistic about Bitcoinโs long-term potential.
โIn 2015, following RMB devaluation, Bitcoin initially experienced a sell-off but concluded the year with significant strength. We may see a similar scenario unfold now, as parallels emerge with our bullish gold research from 18 months ago.โ
Matrixport
Geopolitical battle
This all ties back to the broader U.S.-China tensions, with Beijing saying it will โfight to the endโ over President Donald Trumpโs threat of a 50% tariff on Chinese goods. The situation has gotten more heated, with Trump insisting on new tariffs unless China pulls back on its retaliatory measures, which already include 34% tariffs on U.S. goods.
China has taken a strong stance, warning that more tariffs will just highlight the U.S.โs aggressive approach, which they call โblackmailing.โ
โThe U.S. sideโs threat to escalate tariffs against China is a mistake on top of a mistake, once again exposing the American sideโs blackmailing nature.โ
A spokesman for Chinaโs commerce ministry
For Bitcoin, the growing geopolitical risk and a weaker yuan could create a good opportunity for growth, as investors look to crypto as a hedge against inflation and market uncertainty, the analysts suggest, adding that current prices โmay be artificially suppressed,โ but still โready to surge upward rapidly.โ
