The global financial markets welcomed a warm current this week, with the heavyweight news of "substantial progress" in the US-China trade negotiations in Geneva igniting investors' optimistic sentiment. Prices of mainstream cryptocurrencies like Bit and ETH surged, indicating a significant recovery in market risk appetite.
Both Sides Acknowledge Progress in Negotiations
In the trade negotiations held yesterday (11th) in Geneva, the US delegation led by Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer stated that they had achieved "substantial progress" in trade consultations with China. This message was more clear and positive compared to the previous long-distance rhetoric between the US and China, partially alleviating market uncertainty.
They later told media they would disclose more specific details the next day (Monday) in Geneva time:
Significant progress was made in negotiations with China, and differences may not be as large as imagined.
Chinese officials also echoed this positive tone in another briefing, describing the negotiations as making progress towards "stable and sustainable development of US-China relations". According to official messages from Politico and The White House, both sides agreed to establish a new platform for continuous tariff negotiations and set up a "trade advisory mechanism". This mechanism aims to find effective ways to resolve trade differences through equal dialogue. However, despite the significantly warmer negotiation atmosphere, no immediate agreements on specific measures or timelines for reducing existing tariffs have been announced.
Market Rise Meets Expectations, No Correction Observed Yet
After the Geneva conference, the market did not show obvious profit-taking, indicating a restoration of confidence in asset markets. Three days ago (8th), hours after the news of the US-China meeting in Geneva was disclosed, Bit price surged over 8%, breaking through the 100,000 USD mark and reaching a new high in recent weeks.
ETH was equally impressive, with a more stunning increase of over 40% in three days, returning to the 2,500 USD level. Other mainstream and non-mainstream altcoins also followed the trend, with the total cryptocurrency market value surging by billions of dollars in a short time.
In contrast, traditional safe-haven assets like gold dropped, falling up to 2.5%, indicating a trend of funds moving from safe-haven to higher-risk assets.
In traditional stock markets, Asian stocks generally rose, with Chinese stocks advancing. The Topix index rose for the 12th consecutive trading day, creating the longest winning streak since October 2017. The Hang Seng Index also rose for the 8th consecutive trading day, its best performance in a year. US stock index futures also performed strongly, with S&P 500 futures up 1.4% and Nasdaq 100 futures jumping 2%. International oil prices also increased, with Brent crude touching around 64 USD per barrel, reflecting market expectations of improved global economic growth prospects (market data from Economic Times).
Analysts' Perspectives
Regarding the progress of US-China trade negotiations and its market impact, several market analysts shared their views. Homin Lee, Senior Macro Strategist at Lombard Odier Singapore Ltd., commented:
"While investors are still waiting for details of the US-China agreement, the overall positive tone of negotiations should boost their confidence in China and Asian-Pacific stocks."
This indirectly highlights the importance of macroeconomic stability for overall investment confidence. The cryptocurrency market, being highly sensitive to market sentiment, similarly benefits from such positive signals. However, Sean Darby, Managing Director at Mizuho Securities Asia, cautioned investors to remain prudent:
"In reality, I believe many of these trade agreements will take much longer to finalize."
Valentin Marinov, Head of G-10 FX Research and Strategy at Credit Agricole, also noted:
"Easing of trade, economic, and geopolitical tensions could boost market risk sentiment."
These perspectives align with the strong rebound in the cryptocurrency market after the news. Additionally, Julius Baer suggested that despite the negotiation progress bringing short-term optimism, investors should remain cautious and prepare for potential market volatility.
The institution also recommended that investors remain sensitive to asset valuations and consider converting their US ADRs to shares listed in Hong Kong to diversify risks. These suggestions are equally valuable for cryptocurrency investors given the high volatility.
However, the path to truly "thawing" the trade war, and its long-term impact on the global economy and emerging digital asset classes, will likely be longer and more complex than the market's short-term enthusiastic response. Despite the challenges that remain, this positive step undoubtedly brings more room for imagination and possibilities for market participants to seek new investment opportunities in uncertainty.
