Crypto Market Reacts to Trump’s Trade Strategy and Debt Concerns

Crypto Market – Bitcoin Outperforms Stocks as U.S. Budget Deficit Widens

Crypto Market – Bitcoin (BTC) and Solana (SOL) saw modest gains on Monday as investors monitored diplomatic developments between the United States and China, alongside a closely watched series of upcoming U.S. bond auctions.

According to data from CoinGecko, Bitcoin was trading at $108,000, up 1.7% in the past 24 hours. Meanwhile, Solana rose 2.9% to $156, and Hyperliquid (HYPL) led altcoin gains, jumping 7% to $38.

Trade Tensions Return as U.S. Delegation Heads to London

Investor attention turned to London, where members of President Donald Trump’s trade team, including U.S. Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, are meeting with Chinese officials. The talks are part of the first Sino-U.S. economic and trade consultation mechanism, hosted by Chinese Vice Premier He Lifeng, who is expected to remain in the UK through Friday.

The meeting follows a recent call between Trump and Chinese President Xi Jinping, which Trump described as “positive.” However, rising tensions have emerged as Trump accuses China of violating the 90-day reciprocal tariff pause, set to expire in early July.

U.S. Bond Auctions Pose Risk for Crypto and Equities

Markets are also bracing for potential volatility linked to upcoming U.S. Treasury debt auctions. Analysts at Bitunix warned that poor demand for long-term bonds, especially 20- and 30-year maturities, could lead to a rise in yields, which may pressure risk assets such as cryptocurrencies and equities.

A similar scenario unfolded in late May when a weak 20-year bond auction triggered a 2.4% drop in Bitcoin within one hour, falling to $106,900 after Moody’s downgraded U.S. debt.

Dollar Weakness, Rising Deficits Fuel Bitcoin Narrative

With the U.S. deficit projected to expand by $2.4 trillion under Trump’s One, Big Beautiful Bill (OBBB), long-term concerns around fiscal sustainability are increasing. CoinShares’ Head of Research, James Butterfill, noted that continued bond market weakness could bolster Bitcoin’s appeal relative to equities and Treasuries.

“The U.S. dollar’s reserve status has been slowly eroding,” Butterfill said. “We may be approaching a tipping point where Bitcoin and gold stand to benefit from the resulting volatility.”

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.