US-China Trade Deal Could Signal Shift for Global Markets and Crypto

On October 30, 2025, President Donald Trump and Chinese President Xi Jinping finalized a one-year trade deal in South Korea that suspends several major tariffs and export restrictions.

The agreement comes after months of escalating tensions that peaked with a devastating October 11 crypto crash that wiped out $19 billion in just 24 hours. The deal represents the biggest de-escalation yet between the United States and China, but crypto markets have responded with unexpected caution.

What’s in the Trade Deal

According to the White House fact sheet, China agreed to suspend new export controls on rare earth minerals—materials essential for making smartphones, electric vehicles, and military equipment. The country will also halt fentanyl precursor shipments to the United States and remove all retaliatory tariffs imposed since March 4, 2025.

On the American side, the United States will reduce tariffs on Chinese goods by 10% starting November 10, 2025. The deal also extends key tariff exemptions and suspends certain trade actions related to maritime and shipping investigations for one year.

China committed to buying at least 12 million metric tons of U.S. soybeans by the end of 2025, followed by 25 million metric tons annually through 2028. This agricultural component benefits American farmers who have been hurt by previous trade tensions.

Source: @realDonaldTrump

The agreement runs for one year, with both countries planning to renegotiate annually. President Trump called his meeting with Xi “amazing” and rated it “12 out of 10,” expressing confidence the deal would continue long-term.

The October Crypto Catastrophe

To understand why this deal matters for crypto, you need to know what happened just weeks earlier. On October 9, China announced strict new licensing requirements for exporting rare earth minerals. Trump responded the next day, October 10, by threatening a 100% tariff on all Chinese imports starting November 1.

The announcement triggered the largest liquidation event in crypto history on October 11. Over 1.6 million traders lost positions worth between $19 billion and $30 billion in 24 hours. Bitcoin crashed from above $126,000 to below $102,000. Ethereum dropped 14%. The selling happened so fast that experts compared it to the March 2020 pandemic crash—but this time the damage was nearly 20 times worse.

The Crypto Fear & Greed Index, which measures market sentiment, plunged to an extreme fear level of 18. Long positions betting on price increases made up $16.83 billion of the liquidations, while shorts accounted for only $2.49 billion.

Crypto’s Lukewarm Response

When Treasury Secretary Scott Bessent first announced a trade framework on October 26, crypto markets jumped. Bitcoin rose 1.8% to around $115,000, Ethereum gained 3.6% to over $4,200, and the total crypto market cap increased about 1.9% to roughly $3.92 trillion.

But after the final deal was signed, enthusiasm faded quickly. As of early November, Bitcoin trades around $110,354, up just 0.26% in 24 hours. Ethereum sits at $3,895, up 0.84%. The Crypto Fear & Greed Index improved only slightly from 33 to 37—still firmly in “fear” territory.

This muted response puzzles many observers. Typically, reduced trade tensions boost risk assets like cryptocurrencies. So why aren’t crypto prices surging?

Why Crypto Investors Remain Cautious

Several factors explain the careful reaction. First, the deal leaves many details unclear. Technology access restrictions and enforcement mechanisms remain vague. Many traders view this as a temporary ceasefire rather than a permanent solution.

Second, Bitcoin ownership patterns are changing. Industry analysts note that long-term holders are selling to new institutional buyers at an accelerated rate. This “changing of the guard” from early adopters to traditional finance creates different market dynamics.

Third, Federal Reserve policy looms large. Fed Chair Jerome Powell hinted that the October rate cut might be the last of 2025, saying there’s “a growing chorus” for pausing further cuts. Higher interest rates typically hurt speculative assets like crypto by making safer investments more attractive.

Fourth, spot Bitcoin ETFs recorded $471 million in net outflows following the deal announcement, with no inflows across all 12 Bitcoin ETFs. BlackRock’s IBIT saw $88.1 million leave, while Fidelity’s fund experienced the largest outflow at $164.4 million.

What Comes Next for Crypto

Despite the cautious response, many experts remain optimistic about crypto’s medium-term prospects. The removal of tariff threats and export restrictions could reduce uncertainty that has weighed on all risk assets.

Financial analysts suggest that improved US-China relations could ease cross-border operations for US-listed crypto companies and reduce volatility driven by political headlines. The deal creates space for institutional investors to increase crypto allocations without fearing sudden geopolitical shocks.

Michael van de Poppe, founder of MN Trading Capital, called October 11 a “bottom day in hindsight,” suggesting the worst is behind the market. Other analysts predicted Bitcoin could reach $120,000 again in November as tariff worries fade.

The key question is implementation. Markets will watch closely to see if both governments follow through on commitments. China must actually reduce rare earth export restrictions and purchase American soybeans. The United States needs to implement tariff reductions as promised.

Waiting for the Next Move

The US-China trade deal aims to remove an immediate threat that caused massive crypto losses in October. But investors clearly aren’t ready to celebrate yet. The fear index remains elevated, prices show modest gains at best, and institutional money is flowing out rather than in.

This cautious stance makes sense given recent volatility. The $19 billion liquidation event scarred many traders. Until they see sustained implementation of the trade agreement and clearer Federal Reserve guidance, significant new capital likely stays on the sidelines.