Bitcoin News Today: Crypto Markets Rally as US-China Trade Pact Eases Geopolitical Fears

The U.S. and China have taken a significant step toward de-escalating trade tensions, announcing a preliminary framework agreement on Oct. 26 to avert a 100% tariff on Chinese imports and delay rare earth mineral export controls, according to Beincrypto. The deal, brokered during two days of negotiations in Malaysia and set to be finalized by President Donald Trump and Chinese President Xi Jinping in South Korea, has triggered a rebound in global markets, including a sharp rise in cryptocurrency prices, Beincrypto reported. Bitcoin (BTC) surged to $113,500, while the total crypto market cap climbed to $3.88 trillion, reversing weeks of volatility tied to the October 10 tariff shock, according to Coinpedia.

The trade framework addresses key sticking points, including U.S. tariffs on Chinese goods and Beijing's export restrictions on rare earth materials. U.S. Treasury Secretary Scott Bessent described the agreement as a "very substantial framework" that eliminates the immediate threat of Trump's 100% tariffs, which had previously triggered a $200 billion crypto market wipeout, according to The Street. Chinese Vice Premier He Lifeng emphasized "basic consensuses" on issues such as fentanyl enforcement, agricultural trade, and shipping levies, signaling a shift from recent hardline rhetoric, The Street added.

Cryptocurrency markets responded swiftly to the news. Bitcoin's price climbed 1.8% to $113,600, while Ethereum (ETH) rose past $4,040, Beincrypto reported. Derivatives data showed $319 million in short liquidations over 24 hours, reflecting renewed bullish sentiment, according to CoinDesk. Meanwhile, stablecoin payments hit a record high, with Tether's USDT dominating 79% of payment volume, underscoring growing real-world adoption, as reported by Beincrypto analysis.

The trade deal also reshaped capital flows in crypto investment vehicles. Bitcoin spot ETFs saw $20.33 million in inflows on Oct. 23, while Ethereum ETFs recorded $127.47 million in outflows, highlighting a rotation toward Bitcoin amid macroeconomic uncertainty, according to CryptoNews. BlackRock's iShares Bitcoin Trust (IBIT) led inflows with $107.78 million, while Grayscale's GBTC faced a $60.49 million outflow, CryptoNews noted. Analysts attribute the divergence to Bitcoin's perceived role as a hedge against geopolitical risks, with Jeff Mei of BTSE, as quoted in TradingView, noting, "Volatility will continue as long as there are trade tensions between the U.S. and China."

The volatility spike in October had previously caught markets off guard. A $19 billion liquidation cascade pushed BTC's implied volatility to a multi-month high, with short-term volatility spiking amid the tariff announcement, according to the Bybit x Block Scholes report. The report highlighted a term structure inversion—a rare event reflecting near-term uncertainty—and noted that options traders demanded a 13% volatility premium for bearish bets. While the recent trade deal has eased fears, experts caution that underlying tensions remain. Mei added that "macro concerns are driving day-to-day changes," and a full resolution depends on the Trump-Xi summit.

The deal's ripple effects extended beyond crypto. Brent crude oil futures rose above $66 per barrel, and WTI crude climbed toward $62, as trade-war fears subsided, according to TradingView. However, U.S. sanctions on Russian energy firms like Rosneft and Lukoil continued to support oil prices, TradingView observed.

With the U.S. Federal Reserve's policy meeting looming, markets are now pricing in a more stable macroeconomic backdrop. The trade framework, if finalized, could pave the way for broader economic cooperation, including expanded Chinese purchases of U.S. agricultural goods and regulatory coordination on fentanyl, according to FXStreet. For crypto, the immediate outlook appears cautiously optimistic, though traders remain wary of political developments. As Arthur Hayes of BitMEX told Kanalcoin, "Trade war = volatility, volatility = big moves for $BTC. The game continues."