BIT Research: After the China-US Summit, the Market Begins to Reprice “Long-term Competition”

The market is currently in a macro repricing phase dominated by geopolitical factors and policy expectations. The initial meeting between the Chinese and US leaders was interpreted by the market as a sign of easing tensions, leading to a rise in tech stocks, a weakening US dollar, and an upward movement in Bitcoin. The market had anticipated an easing of tariff pressures, stabilization of the AI supply chain, and a reduction in geopolitical risks related to Taiwan and Iran, which quickly fueled a risk-on sentiment.

However, as details of the meeting emerged, the market discovered that the earlier optimistic pricing lacked sufficient support: there was no substantial easing of tariff policies, no breakthrough in AI export controls, and no significant progress on the Iran and Taiwan issues. Inflation concerns further evolved into expectations of policy tightening, reigniting selling pressure on bonds and precious metals.

From a long-term perspective, the meeting still revealed several noteworthy trends: the marginal weakening of the US dollar's dominant position, the diversification of global reserve asset allocation, the restructuring of the AI and semiconductor supply chains, and the deepening strategic competition between China and the US in cutting-edge technology fields such as low-orbit satellites and space.

From Risk-On to Repricing: The Market Returns to Inflation and Geopolitical Logic

Before the meeting, the market was trading on the "relationship détente" narrative. Tech stocks and commodities rose, the US dollar weakened, and Bitcoin rebounded in tandem, indicating a clear recovery in market risk appetite. Particularly in the AI and semiconductor sectors, the market had hoped that the US might signal goodwill by approving Nvidia chip sales to China, thereby promoting a broader détente. However, as the meeting's outcomes were further digested, market sentiment quickly cooled. There was no substantial easing of tariff pressures, and approved chip sales, such as Nvidia's H200, did not materialize; concurrently, Beijing continued to push for domestic AI alternatives and reduce corporate dependence on foreign AI chips.

More importantly, key geopolitical risks related to Taiwan and Iran were not resolved. The market subsequently repriced the risk that oil prices and inflationary pressures could persist longer, leading to continued global bond selling. Rising real yields also weighed on the performance of gold and silver. In the short term, the meeting was bullish for oil prices but bearish for gold and sovereign bonds. Bitcoin, once again, displayed its characteristics as a "macro liquidity asset."

The issue is that in the short term, Bitcoin is not being priced as a "structural safe-haven asset." Instead, it remains primarily influenced by real yields, risk appetite, and liquidity conditions, behaving more like a high-beta version of the Nasdaq rather than "digital gold." This implies that during macro events like a China-US summit, Bitcoin often acts more like a risk asset than a traditional safe haven.

From Agricultural Purchases to Space Competition: The Long-term Competitive Landscape Intensifies

Beyond macro pricing, the meeting also highlighted that the long-term competitive framework between China and the US remains unchanged. In terms of agricultural purchases, China committed to buying at least $17 billion worth of US agricultural products annually from 2026 to 2028. This commitment is slightly above the lower end of market expectations but below the optimistic scenarios some traders had previously bet on.

However, the market reaction was muted. This is because China's incremental import demand remains limited, with Brazilian agricultural products continuing to squeeze US suppliers on price. Since the first round of Trump's trade war, Beijing has also been diversifying its agricultural import sources to reduce reliance on US products. Furthermore, some of the positive news had already been priced in. China had previously pledged to purchase 25 million tons of US soybeans, so the potential for new commitments from this meeting was relatively limited. In contrast, fertilizer stocks were among the few modest beneficiaries, supported by both the agricultural purchase pledges and supply disruptions stemming from the Iran conflict.

Concurrently, the US-China technology competition is extending further into low-orbit satellite and space infrastructure. China is building a low-orbit satellite constellation to rival Starlink but still lags behind SpaceX in scale and capability. The market believes that if SpaceX gains additional capital support through an IPO, its expansion rate could further widen the gap with its Chinese competitors.

Overall, while the meeting yielded some phased results, including modest trade commitments and the continuation of a dialogue mechanism, the structural contradictions have not truly eased. China and the US appear to be "managing the competition" rather than "resolving it": maintaining sufficient contact to prevent further escalation, but far from changing the long-term trajectory. Against this backdrop, the trends of global reserve asset diversification, AI supply chain restructuring, and the prolongation of geopolitical risks continue. For the market, the truly important variables are no longer just the summit itself, but the repricing of global liquidity, real yields, and the long-term strategic competitive landscape.

Some of the above insights are from BIT on Target. Contact us to get the full BIT on Target report.

Disclaimer: Markets are risky, and investment requires caution. This content does not constitute investment advice. Digital asset trading may involve significant risk and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. BIT is not responsible for any investment decisions made based on the information provided in this content.