BIT Investment Research: After the US-China Summit, the Market Begins to Reprice "Long-Term Competition"

The current market is in a macro re-pricing phase jointly driven by geopolitical factors and policy expectations. Initially, this meeting between the leaders of China and the US was interpreted by the market as a signal of easing tensions, leading to a rise in tech stocks, a weaker US dollar, and a concurrent upward movement in Bitcoin. The market had anticipated relief from tariff pressures, stability in the AI supply chain, and a decrease in geopolitical risks related to Taiwan and Iran, which rapidly fueled a risk-on sentiment.

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

From a long-term perspective, this meeting still reveals several noteworthy trends: the marginal weakening of the US dollar's dominance, the diversification of global reserve asset allocation, the restructuring of the AI and semiconductor supply chains, and the deepening strategic competition between the US and China in cutting-edge technological fields like low-earth orbit satellites and space.

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

Before the meeting, the market was trading on the 'rapprochement' logic. Tech stocks and commodities rose, the US dollar weakened, Bitcoin rebounded, and market risk appetite clearly improved. Especially in the AI and semiconductor sectors, the market had hoped the US might signal goodwill by approving Nvidia chips for sale to China, thereby facilitating a broader détente. But as the meeting's outcomes were digested, market sentiment quickly cooled. Tariff pressures did not see substantive relief, and approved chip sales, such as those for Nvidia's H200, didn't fully materialize. Concurrently, Beijing continues to promote domestic AI alternatives and reduce corporate reliance on foreign AI chips.

More importantly, key geopolitical risks concerning Taiwan and Iran were not resolved. The market is therefore re-pricing the risk that oil and inflationary pressures might persist longer. The ongoing global bond sell-off and rising real yields are also dragging down the performance of gold and silver. In the short term, this meeting is positive for oil prices, negative for gold and sovereign bonds; Bitcoin, meanwhile, once again displays 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' but remains largely influenced by real yields, risk appetite, and liquidity conditions. Its performance is closer to a high-beta version of the Nasdaq rather than 'digital gold.' This also means that in macro events like the US-China summit, Bitcoin often behaves more like a risk asset than a traditional haven.

From Agricultural Purchases to Space Competition: The Long-Term Competitive Landscape Deepens

Beyond macro pricing, this meeting also reflects that the long-term competitive framework between the US and China 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 is slightly above the lower end of market expectations but below the optimistic scenarios some traders had bet on.

However, the market reaction to this was limited. The reasons are that China's incremental import demand is still constrained, Brazilian agricultural products continue to pressure US suppliers with competitive pricing. Furthermore, since the first trade war under Trump, Beijing has been diversifying its agricultural import sources to reduce reliance on US goods. Some of the positive news had also been priced in advance. China had previously pledged to purchase 25 million tons of US soybeans, so the new room for growth from this meeting was relatively limited. Consequently, fertilizer stocks became one of the few mildly benefiting sectors, supported by both the agricultural purchase commitments and supply disruptions stemming from the Iran conflict.

Simultaneously, US-China tech competition is extending further into low-earth orbit satellite and space infrastructure. China is building a Starlink-equivalent LEO satellite constellation, but it still lags behind SpaceX in scale and capability. The market believes that if SpaceX gains more capital support through an IPO in the future, its expansion pace could further widen the gap with its Chinese competitors.

Overall, while this meeting yielded some interim results, including modest trade commitments and a mechanism for continued dialogue, the structural contradictions have not truly eased. The US and China appear to be 'managing competition' rather than 'resolving it': maintaining sufficient contact to prevent further escalation, but far from enough to alter the long-term trajectory. Against this backdrop, trends like the diversification of global reserve assets, the restructuring of the AI supply chain, and the prolonged nature of geopolitical risks continue. For the market, the truly important variables are no longer just a single meeting itself, but the re-pricing 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; invest with caution. This article does not constitute investment advice. Digital asset trading can carry significant risk and volatility. Investment decisions should be made after carefully considering personal circumstances and consulting with a financial professional. BIT is not responsible for any investment decisions made based on the information provided in this content.