U.S. – China Tariff War: Crypto Faces Worst-Case Crash Scenario, Nansen Warns

The escalating U.S.-China tariff war has sent shockwaves through markets, with crypto plummeting this week amid investor panic. Analysts at Nansen warn that further escalation could trigger a worst-case scenario for risk assets, including Bitcoin, which dropped below $75,000 on ‘Black Monday’ after Trump’s latest tariff announcement.

On April 8, 2025, U.S. President Donald Trump unveiled new tariffs on China, prompting swift retaliation from Beijing with tariffs and rare earth export curbs. Trump then threatened a staggering 50% tariff hike, intensifying fears of a global growth shock, according to Nansen’s Aurelie Barthere.

“This is the start of the worst-case scenario,” Barthere wrote in a market update. “It’s growth-negative globally, and we wouldn’t touch crypto until it hits deep bear market levels if this unfolds.” Nansen pegs this dire outcome at a 30% probability, with Bitcoin and equities facing further dumps.

The fallout was immediate. Global equities tanked post-Trump’s Rose Garden speech, while Bitcoin erased gains in a massive sell-off. Nansen notes a 15% chance of stabilization if tensions ease, but the 55% likely base case points to choppy markets until negotiations progress by June.

Analysts suggest the Federal Reserve could intervene if economic deterioration—like a weaker labor market—emerges. For now, patience is key as investors navigate tariff-driven turmoil and uncertainty. Will crypto rebound, or is a deeper crash looming?

Nansen’s outlook hinges on negotiation prospects, with Treasury Secretary Scott Bessent eyeing June as a pivotal milestone. Until then, volatility reigns, leaving crypto and risk assets on edge.

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