U.S.-China escalation ‘worst case scenario’ for risk assets and crypto: Nansen

The crypto has dropped in the middle of a market turmoil focused on prices this week, and Nansen analysts believe that climbing between the United States and China represents the worst case.

Nansen shared their market point of view in the middle of a complete panic of investors, with Bitcoin (BTC) And crypto Suffering from fresh pain in a massive sales action. In the event of global growth shocks as an American compared to China The tariff war degenerates, another dump will follow.

Already, “the announcement of the post-rose garden” saw the global actions plunge, while the BTC abandoned the gains and fell below $ 75,000 on “Black Monday”.

But analysts also see other scenarios playing, suggesting that the best overall socket for investors is that where the rules of patience.

A worst case?

Aurelie Barthere de Nansen wrote in a note “The week after: market update” that the reaction of the market at the prices signals a peak of fears around a slowdown potential for American growth. Panic intensified after the American president Donald Trump announced additional rates against China.

In response, China has introduced reprisals and restrictions on rare earth exports. Trump then threatened an additional 50% rate increase on Chinese products.

Nansen says that this represents the beginning of the worst case for risk assets and crypto.

“This is what the beginning of the worst case is like. It would be negative of growth for each country, and to mark the start of a global growth shock. We would not touch the crypto before the levels of the deep bear market if this scenario takes place,” noted the analyst.

Although this result remains possible, Nansen sees a better case scenario as a potential counterweight. A de -escalation before April 9, 2025 – when reciprocal prices should take effect – could mark the bottom of the bitcoin.

Although Nansen only attributes 15% probability to this result of the best cases, analysts claim that such an event could lead to stabilization between risky asset markets and a lively rebound for digital assets.

On the other hand, the worst case receives a probability of 30%.

The basic case of Nansen, however, has a probability of 55%. In this scenario, a form of negotiation takes place and a possible resolution helps the crypto to recover. June remains a key step, as initially underlined by the secretary of the Treasury Scott Bessent.

If this is the case, the markets are likely to remain jerky in the midst of uncertainty. Bitcoin and actions will escape earnings and prices that the benefits dictate the feeling.

As for what can help the markets, the Fed coming to the rescue, Note Nansen.

But only a lower labor market and “visible economic deterioration” could force the Fed’s hand. In this case, analysts consider patience as the best approach because investors weigh climbing compared to the negotiation space.