Tag Archives: trade

US-China trade deadline: Markets brace for impact

US-China trade deadline: Markets brace for impact

The Trump administration has issued a directive for countries to submit their best offers on trade negotiations by June 4, 2025, signalling an intent to expedite discussions with multiple trade partners. This deadline introduces a pivotal moment that could either pave the way for resolution or escalate existing frictions, further influencing market behaviour.

At the heart of this economic narrative lies the ongoing US-China trade dispute, a saga that has seen periodic escalations and temporary reprieves over recent years. The latest chapter involves heightened rhetoric and the looming deadline set by US officials, which has rekindled fears of tariff impositions or retaliatory measures.

The Trump administration’s push to accelerate trade talks is a strategic move aimed at securing favourable terms swiftly, but it also amplifies the stakes. Investors are left to ponder whether this pressure will yield constructive agreements or deepen the divide, particularly with China, whose economic policies and responses remain critical variables in the global equation.

The uncertainty is palpable, as markets historically react sharply to any whiff of trade war escalation, given the interconnectedness of global supply chains and trade flows.

Simultaneously, the US factory sector has delivered a sobering reality check. Recent data revealed weaker-than-expected performance, with manufacturing activity faltering amid softening demand and supply chain pressures. This downturn is significant because the manufacturing sector serves as a bellwether for broader economic health in the United States, the world’s largest economy.

The disappointing figures have fuelled concerns that the US might be losing momentum at a time when global growth is already under scrutiny. This development not only contributes to the subdued risk sentiment but also raises questions about the Federal Reserve’s next moves, as policymakers weigh the balance between supporting growth and managing inflationary pressures.

Speaking of the Federal Reserve, Chicago Fed President Austan Goolsbee, a voting member of the 2025 Federal Open Market Committee, has offered a measured perspective on the situation. He suggested that the Fed could proceed with interest rate cuts if the uncertainty surrounding trade policy dissipates, a statement that hints at a readiness to ease monetary conditions under the right circumstances.

Goolsbee also remarked that recent economic data has shown “surprisingly little impact so far” from the trade tensions, implying that the US economy has, to some extent, weathered the storm thus far. This cautiously optimistic tone contrasts with the market’s unease, highlighting a disconnect between official assessments and investor sentiment that often characterises periods of transition.

Despite the overarching caution, US stock markets managed to defy gravity on Monday, closing the session in positive territory. The Dow Jones Industrial Average edged up by 0.08 per cent, the S&P 500 climbed 0.41 per cent, and the Nasdaq Composite advanced 0.67 per cent. This resilience is noteworthy, especially as the CBOE Volatility Index, commonly known as the “fear index,” eased to 18.36 from 18.57.

While still above its long-term average, the VIX’s decline suggests a slight tempering of immediate market anxiety. However, this uptick in equities stands in contrast to broader global trends, as Asian equity indices closed mostly lower and continued to slide into the next day, while US equity futures signalled a weaker opening ahead. This divergence underscores the uneven impact of risk sentiment across regions and asset classes.

The bond market, meanwhile, painted a different picture. US Treasury yields rose across the maturity spectrum, with the 30-year yield briefly touching the psychologically significant five per cent mark. The 10-year yield increased by 4.0 basis points to settle at 4.440 per cent, and the two year yield rose by 3.9 basis points to 3.937 per cent.

This upward movement in yields reflects a shift in investor expectations, potentially driven by concerns over inflation or anticipation of tighter monetary policy down the road. Higher yields typically indicate that bond investors are demanding greater compensation for holding government debt, a sign that confidence in the economic outlook might be wavering or that inflationary pressures are creeping into the calculus.

In the currency markets, the US Dollar Index experienced a notable decline, dropping 0.63 per cent to its lowest close since April 21, 2025. This weakening of the dollar is a critical development, as it influences everything from trade competitiveness to commodity pricing. The dollar’s slide could be attributed to the confluence of trade uncertainties and shifting monetary policy expectations, which have diminished its appeal as a safe-haven currency in this instance.

Conversely, gold seized the opportunity to shine, rebounding by a robust 2.8 per cent. This surge aligns with gold’s traditional role as a refuge during times of geopolitical tension and currency depreciation, reinforcing its status as a barometer of investor unease.

Commodities offered additional insights into the market’s mood. Brent crude oil prices climbed 2.9 per cent to US$65 per barrel, a move that defies the OPEC+ decision to unwind an additional 411,000 barrels per day of output cuts in July.

This rise suggests that factors beyond supply adjustments—such as demand expectations, geopolitical risks, or currency effects—are driving oil prices higher. The resilience of oil in the face of increased production highlights the complexity of the current environment, where traditional supply-demand dynamics are overlaid with broader macroeconomic currents.

The cryptocurrency market, often a wild card in financial narratives, also made headlines. Bitcoin, after a meteoric 50 per cent surge over the past 45 days that propelled it to a record peak of US$111,880, shed nearly eight per cent in a sharp correction. This pullback, the first significant retreat since its April lows of US$74,501, follows a period of remarkably steady gains, as noted in the latest Bitfinex Alpha report.

Analysts have flagged potential turbulence in Bitcoin derivatives markets, where options open interest recently hit a staggering US$49.4 billion before retreating to US$39 billion post-May expiry. This peak, coupled with a spike in perpetual futures open interest near all-time highs, points to heightened speculative activity and a subsequent flushing out of leverage. Such dynamics suggest that Bitcoin traders are girding for volatility, a not-uncommon scenario for an asset known for its dramatic price swings.

Amid this turbulence, Strategy (MSTR), a firm with a well-documented Bitcoin strategy, doubled down on its commitment. The company acquired an additional 705 BTC for US$75 million, boosting its total holdings to 580,955 BTC at an average purchase price of US$70,023 per Bitcoin.

This latest purchase, executed at US$106,495 per BTC, was financed through at-the-market equity offerings via its perpetual preferred share classes STRK and STRF. Strategy’s unwavering accumulation reflects a belief in Bitcoin’s long-term value, even as short-term price fluctuations test the market’s resolve.

In a contrasting corporate narrative, Meta shareholders overwhelmingly rejected a proposal to consider Bitcoin as a treasury asset, with 95 per cent voting against it and less than one per cent in favour, per a Securities and Exchange Commission filing. This decisive rebuff underscores a preference for traditional financial strategies over speculative ventures into cryptocurrency.

Yet, Meta’s stock surged 3.6 per cent on news of its plan to deploy a fully AI-driven advertising engine by 2026, signaling that investors are far more enthusiastic about the company’s technological ambitions than its potential dalliance with Bitcoin.

In my view, the subdued global risk sentiment is a rational response to the twin pressures of US-China trade tensions and faltering US factory performance. The Trump administration’s June 4 deadline injects urgency into an already fraught situation, creating a high-stakes environment where outcomes remain uncertain.

A successful resolution could bolster confidence, but any misstep risks deepening economic fissures, particularly given China’s pivotal role in global trade. The manufacturing data, meanwhile, serves as a warning sign that the US economy may not be as robust as hoped, amplifying calls for policy intervention.

The Federal Reserve’s stance, as articulated by Goolsbee, strikes me as pragmatic yet cautious. The prospect of rate cuts contingent on trade clarity is a sensible approach, but the uptick in Treasury yields suggests that markets are already factoring in inflationary risks or a potential hawkish pivot. This tension between Fed rhetoric and market pricing could foreshadow challenges ahead, especially if economic indicators continue to soften.

Market reactions are a mixed bag. The resilience of US stocks is encouraging, but the broader global picture—evident in weaker Asian markets and US futures—hints at pervasive caution. The dollar’s decline and gold’s rally signal a flight to safety, while oil’s strength amid OPEC+ adjustments points to underlying demand or risk premiums at play.

In the crypto realm, Bitcoin’s correction feels like a natural pause after an extraordinary run, though Strategy’s steadfast accumulation contrasts sharply with Meta’s shareholder conservatism, illustrating divergent views on digital assets.

Ultimately, we’re in a period of flux where vigilance is paramount. Trade talks, economic data, and Fed decisions will steer the course, and while opportunities exist, the risks are equally pronounced. Investors would do well to stay informed and agile as this story unfolds.

 

Source: https://e27.co/us-china-trade-deadline-markets-brace-for-impact-20250603/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

A global shift: Trade tensions, market resilience, and crypto challenges

A global shift: Trade tensions, market resilience, and crypto challenges

The global outlook is once again gripped by uncertainty as trade tensions between the United States and China escalate, with President Donald Trump accusing China of violating a recent tariff agreement. This accusation has reignited fears of a protracted trade war, sending shockwaves through markets and causing a notable retreat in global risk sentiment.

Investors, already navigating a complex economic environment, are now bracing for the potential fallout from renewed disputes between the world’s two largest economies. The situation is further complicated by mixed economic signals from the US, where inflation remains stable but consumer sentiment shows signs of resilience.

Meanwhile, financial markets have exhibited a blend of caution and resilience, with stock indices managing to hold onto gains despite the turbulence. In the cryptocurrency space, Bitcoin hovers near record highs amid regulatory scrutiny of new exchange-traded funds (ETFs).

As the world watches these developments unfold, the interplay between geopolitical tensions, economic data, and market reactions paints a picture of a global economy at a critical juncture.

Trade tensions resurface: A threat to global stability

The latest escalation in US-China trade tensions stems from President Trump’s claim that China reneged on commitments made in a previous tariff agreement. While the specifics of the alleged violation remain murky, the accusation alone has heightened market uncertainty.

Trade disputes between the US and China have been a recurring source of volatility in recent years, with tariffs and counter-tariffs disrupting global supply chains, increasing costs for businesses, and ultimately weighing on economic growth. The prospect of a renewed trade war has investors on edge, as it could lead to higher inflation, reduced corporate profits, and slower global economic expansion.

The situation is particularly precarious given the already fragile state of the global economy, which has been grappling with inflationary pressures, supply chain bottlenecks, and the lingering effects of the COVID-19 pandemic.

For now, markets are left speculating about the severity of the violation and the potential retaliatory measures that could follow, adding a layer of unpredictability to an already volatile environment.

US economic data: A mixed bag of stability and optimism

Amid this backdrop of geopolitical uncertainty, recent economic data from the United States has provided a mixed but somewhat reassuring picture. The Personal Consumption Expenditures (PCE) inflation index, a key measure of inflation closely monitored by the Federal Reserve, came in line with market expectations.

This suggests that inflationary pressures, while persistent, are not accelerating beyond what was anticipated, offering some relief to policymakers and investors alike. Stability in PCE inflation is significant because it’s the Fed’s preferred gauge, influencing decisions on interest rates that ripple through global markets.

Meanwhile, the University of Michigan’s consumer sentiment index for May was revised higher, indicating that American consumers are feeling more optimistic about the economy. This optimism is a crucial driver of economic activity, as consumer spending accounts for roughly 70 per cent of US GDP.

However, the same survey also showed a pullback in consumers’ long-term inflation expectations, suggesting that the public does not anticipate sustained high inflation in the coming years. This divergence could signal confidence in the Fed’s ability to manage inflation, but it also complicates the central bank’s task of balancing growth and price stability in an uncertain global context.

Market reactions: Resilience amid volatility

Despite the looming trade tensions, US stock markets have shown remarkable resilience. On Friday, the major indices closed mixed: the S&P 500 dipped slightly by 0.01 per cent, the Dow Jones Industrial Average edged up by 0.13 per cent, and the Nasdaq Composite fell by 0.34 per cent. These daily fluctuations mask a broader trend of strength, as all three indices managed to post weekly gains and ended the month on a strong note.

This ability to hang onto gains despite the topsy-turvy tariff developments suggests that underlying economic fundamentals—bolstered by consumer confidence and the Fed’s supportive policies—are providing a buffer against geopolitical noise. However, the Nasdaq’s sharper decline hints at vulnerability in technology stocks, which are often more sensitive to global trade disruptions due to their reliance on international supply chains.

In the bond market, US Treasury yields painted a picture of cautious investor sentiment. Yields mostly fell across the curve, with the 10-year Treasury yield dropping by 1.8 basis points to 4.400 per cent and the 2-year yield declining more sharply by 4.1 basis points to 3.897 per cent. Falling yields indicate rising bond prices, a classic sign that investors are seeking safety amid uncertainty.

The exception was the 30-year yield, which rose by 1.4 basis points, possibly reflecting lingering long-term inflation expectations despite the pullback in consumer surveys. This divergence suggests a market grappling with short-term risks—like trade tensions—while still pricing in a degree of long-term economic stability.

Currency and commodity markets offered further clues about investor sentiment. The US Dollar Index edged up by 0.1 per cent, a modest gain that may reflect a flight to safety, as the dollar is often seen as a haven currency during times of global uncertainty. Gold, another traditional safe haven, moved in the opposite direction, falling by 0.86 per cent to US$3,289 per ounce.

This decline could be tied to the slightly stronger dollar, as gold prices typically have an inverse relationship with the greenback. Brent crude oil extended its decline, dropping by 0.9 per cent to US$63 per barrel, amid concerns about a potential production hike. An increase in oil supply could further depress prices, especially if trade tensions dampen global demand—a scenario that seems increasingly plausible given the current climate.

Asian markets feel the heat

Asian equity markets, which are particularly sensitive to US-China trade dynamics, struggled on the final trading day of May. The Shanghai Composite fell by 0.5 per cent, the Hang Seng Index dropped by 1.2 per cent, and the KOSPI declined by 0.8 per cent.

This downward trend continued into the next trading session, with US equity futures indicating a lower open for US stocks. Asia’s vulnerability stems from its deep integration into global supply chains and heavy reliance on exports, particularly to the US and China.

When trade tensions flare, the ripple effects are felt acutely in markets like Hong Kong and Shanghai, where investor sentiment can sour quickly. The continuation of this trend into the following day suggests that the retreat in global risk sentiment is not a fleeting reaction but a deepening concern that could weigh on markets in the near term.

Bitcoin’s dance near the top

In the cryptocurrency space, Bitcoin’s price has settled around US$105,500 after pulling back from its new all-time high of US$111,800 last week. This stabilisation comes as technical indicators hint that the current rally may be nearing a short-term top. Yet, the longer-term outlook remains optimistic, with analysts suggesting that Bitcoin could push toward US$115,000 if it holds above the critical US$103,000 to US$105,000 range.

On the flip side, a break below US$103,000 could trigger a deeper correction, with price targets in the US$93,000 to US$97,000 range. Bitcoin’s volatility reflects its speculative nature, but it’s also a barometer of broader risk sentiment. The pullback from its peak could be tied to the same uncertainties driving investors toward safer assets like Treasuries, though the crypto market’s distinct dynamics—less tethered to traditional economic cycles—keep its trajectory unpredictable.

Regulatory hurdles for crypto ETFs

Adding another layer of complexity, the US Securities and Exchange Commission (SEC) has raised concerns about whether the proposed REX-Osprey Ethereum (ETH) and Solana (SOL) ETFs qualify under the Investment Company Act of 1940. Despite these concerns, the ETFs’ registration became effective on May 30, though unresolved questions linger.

In a letter to ETF Opportunities Trust, the SEC flagged issues with the ETFs’ structure, particularly their staking components, and whether they primarily invest in securities as required by the 1940 Act. This scrutiny follows SEC guidance issued a day earlier, exempting certain staking practices from securities rules, highlighting the regulatory tightrope the agency is walking as it grapples with the rise of crypto products.

ETF Opportunities Trust, a Delaware-based open-end investment company, serves as the issuer for these ETFs, managed by REX Shares and Osprey Funds. Their January 21 filing didn’t stop at ETH and SOL—it also included ambitious proposals for ETFs tied to the TRUMP meme coin, BONK, Dogecoin, Bitcoin, and XRP. The SEC’s hesitation reflects broader uncertainty about how to classify cryptocurrencies and their derivatives under existing laws.

For investors, this regulatory limbo introduces both risk and opportunity: approval could open the floodgates for mainstream adoption, while rejection or delays could stall the integration of crypto into traditional finance.

Tying it all together: A world on edge

The resurgence of US-China trade tensions has injected a fresh wave of uncertainty into global markets, driving a retreat in risk sentiment that’s palpable from Wall Street to Shanghai. Economic data from the US offers a mixed picture—stable inflation and rising consumer confidence provide some comfort, but the spectre of a trade war looms large.

Markets have shown resilience, with stocks clinging to gains and bonds signalling caution, but the volatility in currencies, commodities, and equities underscores the fragility of the moment. Bitcoin’s high-wire act near US$105,500 mirrors this tension, while the SEC’s scrutiny of crypto ETFs reminds us that regulatory challenges are as critical as economic ones in shaping the future.

For investors, this is a time to stay engaged. The interplay of trade disputes, economic indicators, and market movements suggests that risks are rising—but so are opportunities for those who can navigate the storm.

As the US and China spar over tariffs, and as regulators wrestle with the crypto frontier, the global economy stands at a crossroads. Adaptability and vigilance will be key to thriving in this uncertain world.

 

Source: https://e27.co/a-global-shift-trade-tensions-market-resilience-and-crypto-challenges-20250602/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Economic headwinds: Trade wars, slowing growth, and China’s quiet nod to Bitcoin

Economic headwinds: Trade wars, slowing growth, and China’s quiet nod to Bitcoin

A rich tapestry of interconnected issues—global risk sentiment, Trump’s trade war, a slowing US economy, and Bitcoin’s potential as a reserve asset—that demand a thorough and nuanced analysis.

With markets in flux and new data points emerging daily, I’ll weave together the facts, figures, and broader implications to provide a comprehensive view of where we stand and where we might be headed. My perspective is informed not only by the latest market movements but also by a belief—echoed in my earlier writings—that corrections are a natural and necessary part of any asset’s journey toward a sustainable bull run.

Let’s begin with the global risk sentiment, which has noticeably pulled back in recent days. Investors, once buoyed by cautious optimism, are now paring back their enthusiasm as legal uncertainties surrounding President Trump’s trade war cast a shadow over the markets.

The trade war, a hallmark of Trump’s economic policy, has been a rollercoaster of tariffs, negotiations, and legal battles. Just when it seemed the bulk of his tariff agenda might unravel due to judicial challenges, a federal appeals court stepped in, offering a temporary reprieve by allowing the tariffs to remain in effect.

This ruling has had an immediate impact on equity markets. Overnight, the S&P 500 rose by 0.4 per cent, the Dow Jones by 0.3 per cent, and the Nasdaq Composite by 0.4 per cent—modest gains that hinted at resilience. Yet, much of that advance was trimmed as the court’s decision sank in, reminding investors that the tariff saga is far from over. The prolonged uncertainty is a weight on market sentiment, as the specter of future legal reversals looms large, threatening to disrupt supply chains and corporate planning further.

Compounding this unease is the state of the US economy, which is showing unmistakable signs of strain. Data reveals that the economy shrank at the start of the year, a contraction driven by weaker consumer spending and a more pronounced drag from trade than initially estimated. Consumer spending, the backbone of the US economy, is faltering as households feel the pinch of higher costs—some of which can be traced back to the tariffs themselves.

Businesses, too, are grappling with increased input costs and disrupted trade flows, which have dampened investment and growth. This economic slowdown is not just a domestic concern; it reverberates globally, amplifying the risk-off mood as investors reassess their exposure to US assets.

Across the globe, other economic signals are adding layers of complexity. In Japan, inflation has surged to its highest level in two years, fueled by rising energy prices and persistent supply chain bottlenecks. This inflationary spike, paired with robust wage growth, is stoking speculation that the Bank of Japan (BOJ) might raise interest rates in the second half of 2025.

For years, the BOJ has maintained an ultra-accommodative stance, but these pressures may force a pivot. If the BOJ does tighten policy, it could strengthen the yen, shift capital flows, and influence global bond yields—a development that would ripple through markets already on edge.

In the bond market, we’re seeing a clear flight to safety. US Treasuries have rallied, with the 2-year yield dropping by 5.2 basis points and the 10-year yield falling by 5.9 basis points. This uptick in Treasury prices reflects growing expectations that the Federal Reserve will cut rates to counteract the economic slowdown. The latest labor market data bolsters this view: recurring applications for US jobless benefits have spiked to their highest level since November 2021, hinting at a potential rise in unemployment.

For traders, this is a red flag—a sign that the Fed may need to step in sooner rather than later to shore up the economy. Lower yields on Treasuries signal not just a haven demand but also a recalibration of monetary policy expectations, with implications for everything from mortgage rates to corporate borrowing costs.

Turning to currencies and commodities, the picture is equally telling. The US Dollar Index (DXY) has held steady in early trading, down just 0.6 per cent, a resilience that underscores its safe-haven status amid global turmoil. Gold, another classic refuge, has climbed above US$3,300 per ounce, up 0.9 per cent, as investors seek to diversify and hedge against both inflation and uncertainty.

Meanwhile, Brent crude has slipped 1.2 per cent to just below US$65 per barrel, a decline tied to worries about slowing demand—particularly from a faltering US economy—and anticipation of OPEC+ decisions on output. These commodity shifts highlight the push-and-pull between haven assets and growth-sensitive ones, a dynamic that mirrors the broader risk sentiment.

Equity markets outside the US are feeling the strain as well. Asian shares fell in early trading, reflecting the global contagion of uncertainty, while US equity index futures suggest a 0.3 per cent lower open for American stocks. This synchronised retreat underscores how interconnected today’s markets are—legal rulings in Washington, economic data from Tokyo, and policy whispers from Beijing can collectively sway sentiment from Wall Street to Shanghai.

And then there’s Bitcoin, which brings us to one of the most fascinating subplots in this narrative. China’s International Monetary Institution (IMI), a state-backed think tank housed within the prestigious Renmin University, has quietly thrust Bitcoin into the spotlight. In a republished article, the IMI describes Bitcoin as “transitioning from a speculative asset to a strategic reserve asset.” This is no small statement, even if it stops short of an official endorsement.

The IMI, founded in 2009 to explore monetary finance theory and policy, carries weight—its leadership includes senior academics and advisers with ties to China’s policymaking elite. For a country that has historically cracked down on cryptocurrencies, this subtle nod to Bitcoin’s potential is a seismic shift. It’s not a central bank proclamation or a legislative green light, but it’s a policy-side whisper that could signal a rethinking of Bitcoin’s role in global finance.

Why does this matter? If China—or any major economy—were to seriously consider Bitcoin as a reserve asset, it could reshape the global monetary order. Reserve assets, traditionally dominated by the US dollar, gold, and a handful of other currencies, underpin central banks’ ability to manage liquidity and stabilise economies.

Bitcoin, with its decentralised nature and finite supply, offers a radical alternative—one that could hedge against dollar dominance or inflationary pressures from fiat currencies. The IMI’s commentary might be a trial balloon, testing the waters for how such a move would be received. Given China’s economic clout, even a gradual embrace of Bitcoin could spur other nations to follow suit, amplifying its legitimacy and value.

Bitcoin’s price action, meanwhile, is a microcosm of its broader journey. After hitting a new all-time high of US$111,970, it pulled back to around US$105,500, a drop of over 1.5 per cent. This retreat isn’t surprising—price discovery phases are inherently volatile, marked by sharp rallies and corrections as investors cash in profits and reposition.

The open interest in Bitcoin derivatives has soared, with BTC option contracts reaching a record US$46.2 billion, a sign of heightened speculation and hedging. Yet, profit-taking remains below extreme levels, suggesting that the market isn’t yet overheated. Glassnode analysts, whose data I trust for its rigour, see this pullback as a healthy part of Bitcoin’s maturation.

Their Relative Unrealised Profit metric shows the asset nearing a “euphoric phase,” with unrealised gains spiking above the +2 standard deviation band. These phases often bring rapid price swings and volatility, but they’re typically short-lived, paving the way for the next leg up.

This brings me to my own view, one I’ve articulated before in an X post: for Bitcoin to hit a “super bull run season,” we need corrections—ideally a minimum of 30 per cent. I stand by that assessment. The current dip, while notable, is modest in the grand scheme of Bitcoin’s cycles. Historically, Bitcoin has endured drawdowns of 40 per cent or more during bull markets, only to rebound stronger.

A deeper correction would shake out weak hands, reset expectations, and set the stage for sustainable growth—potentially pushing Bitcoin past US$150,000 or higher in the next phase. The IMI’s musings, combined with global uncertainty, could fuel that narrative, positioning Bitcoin as both a speculative play and a strategic asset for institutions.

Trump’s trade war and a slowing US economy are stoking risk aversion, driving investors toward Treasuries and gold while equities falter. Japan’s inflationary pressures hint at tighter policy ahead, adding another variable to the mix. And Bitcoin, buoyed by China’s subtle nudge and its own market dynamics, is carving out a unique space—one that blends speculative fervour with strategic potential.

I see opportunity amid the chaos. The corrections we’re witnessing, whether in stocks or crypto, are pruning the market for what could be a transformative next chapter. For Bitcoin, the path to reserve status is still hypothetical, but the conversation has begun—and that alone is a story worth watching.

 

Source: https://e27.co/economic-headwinds-trade-wars-slowing-growth-and-chinas-quiet-nod-to-bitcoin-20250530/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j