China’s Tariff Response Quietly Rocks Bitcoin in Global Markets

JPMorgan analysts say China’s yuan management and tariff-driven dollar liquidity cycles shape bitcoin’s behavior beyond direct flows.

Rich by Coin

2026-01-28

This managed FX regime influences bitcoin indirectly through global dollar liquidity and tariff-driven macro cycles.

In other words, China’s exchange rate management tends to supercharge dollar-driven cash flows during the escalation of trade tensions, like storms that make the flood worse.

That’s exactly how bitcoin traded in March-April last year after trade tensions escalated.

China’s influence on crypto prices runs indirectly through currency management and global liquidity cycles, data suggests, unlike the U.S., where it flows directly via capital movements in exchange-traded funds and other alternative investment vehicles.

For crypto markets, that framework shifts the focus away from sustained yuan appreciation and toward liquidity transmission.

JPMorgan’s outlook reinforces that logic.

China may not allow the yuan to strengthen meaningfully, but the interaction among tariffs, managed FX, and dollar liquidity still shapes the macro environment in which bitcoin trades.

This affects bitcoin, which is a macro-sensitive asset.

Bitcoin trades within a managed FX regime that influences price dynamics through global dollar liquidity and tariff-driven macro cycles.

The framework shifts focus from yuan appreciation to liquidity transmission, shaping bitcoin’s moves during periods of tariff tensions.

JPMorgan’s outlook supports this view, highlighting the indirect channel by which policy and liquidity affect crypto markets.

During spikes in trade tensions, China’s exchange rate management tends to amplify dollar-driven cash flows, a pattern that helped explain bitcoin activity in March and April last year.

The influence is less about direct capital flows and more about the liquidity backdrop that governs crypto markets.

Unlike the US, where flows can move directly through ETFs and other vehicles, China’s impact operates through currency policy and liquidity cycles.

As a result, traders focus on liquidity transmission rather than yuan strength, with tariffs and FX management shaping the macro environment in which bitcoin trades.