Bitcoin (BTC) saw a notable increase as optimism surrounding the potential de-escalation in the US-China trade standoff sparked renewed demand for riskier assets.

🔑 Key Takeaways:

• Bitcoin (BTC) rose as much as 3.2% to surpass $97,714 before slightly paring its gains.
• Ether (ETH) also climbed, increasing by up to 4.2%.
• US-China trade talks in Switzerland this week are fueling hopes of a resolution, boosting market sentiment for risk assets like Bitcoin.
• Options market shows growing demand for Bitcoin call options with strike prices near $100,000.

📈 Bitcoin’s Rally in Response to US-China Trade Developments

On May 7, 2025, Bitcoin saw a significant rally, rising 3.2% to briefly top $97,714 before some profit-taking pared its gains. The rise follows optimism surrounding US-China trade talks, as US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are set to meet Chinese officials in Switzerland this week. This raised hopes that the world’s two largest economies may reach an agreement to ease the ongoing tariff disputes, which in turn spurred demand for riskier assets, including cryptocurrencies like Bitcoin.

Alongside Bitcoin’s rally, Ether (ETH) rose by as much as 4.2%, reflecting a broader “risk-on” sentiment in the market. Investors appear to be betting on positive developments from the trade talks, largely ignoring the geopolitical tensions in South Asia between India and Pakistan, which have escalated following military strikes.

💹 Increased Demand for Bitcoin Options

FalconX Ltd., a digital-asset prime brokerage, has reported renewed interest in Bitcoin as market sentiment remains positive about the potential outcome of the US-China trade negotiations. Sean McNulty, derivatives trading lead at FalconX, noted that the market is showing growing optimism, with an increase in call option activity focused on a $100,000 strike price for Bitcoin. This suggests traders are betting on further price increases in the near term.

🌍 Broader Risk-On Sentiment Boosts Crypto Markets

This “risk-on” sentiment is evident across multiple asset classes. According to QCP Capital trader Yuan Rong Tan, the reopening of trade dialogue between the US and China is contributing to stronger global equities, a slight retreat in gold, and a modestly higher US dollar. All of these factors are providing a tailwind to crypto markets, including Bitcoin.

Bitcoin’s price surge is also a reminder of the market dynamics that have shaped the cryptocurrency space. The cryptocurrency hit an all-time high of $109,241 in January 2025, fueled by optimism over President Donald Trump’s pro-crypto stance. However, the US tariff program and subsequent market turmoil have caused Bitcoin’s price to fluctuate in recent months.

⚖️ Market Focus Shifts to Federal Reserve Rate Decision

In addition to the US-China trade talks, Bitcoin investors are also closely monitoring Wednesday’s Federal Reserve rate decision, where policymakers are widely expected to leave interest rates unchanged. Any commentary on economic conditions or inflation expectations could further influence market sentiment for risk assets like Bitcoin.

🌐 Conclusion: Bitcoin’s Reaction to Global Trade Developments

Bitcoin’s rise amid renewed optimism for US-China trade talks highlights the cryptocurrency’s growing role as a risk asset in global financial markets. As trade tensions between the two largest economies ease, Bitcoin could continue to benefit from the broader bullish sentiment in financial markets. Investors appear to be positioning for upside potential, as indicated by the options market’s focus on $100,000 call options.