Ethereum Overtakes Bitcoin: A New Balance of Power After the U.S.-China Agreement

By: coincodex|2025/05/14 19:15:05
0
Share
copy
U.S. duties on most Chinese goods will drop from 145% to 30%, while China will reduce levies on U.S. products from 125% to 10%.This diplomatic warming caused a sharp rise in risk appetite, U.S. stocks opened with a 3% gap up as markets began to consider the possibility of a recovery in cross-border capital flows.Gold, traditionally a protective asset in times of uncertainty and protectionism, reacted by falling nearly 3%, although it later partially recovered. The return to a more traditional macro regime (stronger U.S. dollar, rising Treasury yields, weaker gold) stimulated a new wave of selling in volatility-related instruments across asset classes. The VIX index fell to 18 points, and Bitcoin volatility on the near end of the curve declined by more than 5 points.Bitcoin and Ethereum: Multidirectional movementsBitcoin and Ethereum initially declined following the tariff announcement, but have since stabilized around the $103,000 and $2,600 marks, respectively. Beneath the surface, however, there are signs of capital rotation. Bitcoin's dominance has fallen below 63%, while altcoins, especially Ethereum, are starting to outperform the first cryptocurrency.Bitcoin remains in a contradictory position between its role as “digital gold” and its function as a high-risk proxy asset. This contradiction continues to make it difficult to establish a clear direction of movement. As the macroeconomic narrative shifts from protectionism to renewed trade optimism, Bitcoin may remain in a sideways trend.Nevertheless, a broader pivot could influence derivatives flows. Longer investment horizons typically support demand for long-dated options, reduce the need for near-term put hedging, and increase the steepness of the volatility curve.Ethereum forms a clearer pictureEthereum, by contrast, demonstrates more understandable dynamics. Funding remains neutral, and options are skewed toward puts relative to calls, indicating that the breakout is not driven by speculative activity. The net move above $2,600 coincides with the rollout of the Pectra upgrade.QCP Capital analysts note a resurgence in flows into longer-dated options, which may be an early sign that Ethereum is positioning itself as the next major target for capital allocation in the market.The trading strategies are based on the current market situation. Let’s consider the main directions in more detail.Trading strategies for the current marketCoincodex suggests considering strategies that take into account the new macroeconomic regime. One of the key ideas is the use of option structures that can capitalize on the changing shape of the Bitcoin volatility curve.A calendar spread strategy for Bitcoin involves selling short-term options and buying long-term options at the same time. This allows the trader to benefit from lower near-term volatility while maintaining exposure to potential long-term movements. This approach can be particularly effective now that Bitcoin's short-term volatility has been significantly reduced.For Ethereum, analysts suggest considering strategies that focus on continued growth. One option is to buy call options with target levels above its current price of $2,600, which could bring significant profits in case of further upside. Given that option skew currently favors puts, the value of such calls may be relatively low (and therefore attractive to buyers).A bullish call spread strategy for Ethereum can be implemented by simultaneously buying call options with a lower strike and selling call options with a higher strike. This limits both potential gains and potential losses, but reduces the overall cost of the position.Macroeconomic changes described in the QCP Capital report are creating a new reality for cryptocurrency markets. The reduction of tariffs between the U.S. and China stimulates global financial flows and changes investors’ attitudes toward risk. In this environment, Bitcoin may temporarily lose some of its appeal as a defensive asset, but it will retain its fundamental value. Ethereum, with technological upgrades and growing institutional interest, is forming its own growth trajectory, as evidenced by increasing volumes of long-term options.Kraken: Best crypto exchange for security & reliabilityBuy, sell, and trade 400+ cryptocurrencies with industry-leading securitySpot, Futures & Margin trading – leverage up to 5x for advanced tradersEarn rewards with staking on top cryptocurrencies24/7 customer support and high liquidity for fast tradesRegulated in the US with strong compliance and security measures13+ million users worldwideGet Started on Kraken

You may also like

a16z: 5 Ways Blockchain Helps AI Agent Infrastructure

Artificial intelligence makes scaling cost-effective, but it is difficult to establish trust. Cryptocurrency can rebuild trust on a large scale.

Morning News | The Hong Kong Securities and Futures Commission announced the regulatory framework for secondary market trading of tokenized investment products; Strategy increased its holdings by 34,164 bitcoins last week; KAIO completed a strategic fi...

Overview of Important Market Events on April 20

What Is an XRP Wallet? The Best Wallets to Store XRP (2026 Updated)

An XRP wallet lets you safely store, send, and receive XRP on the XRP Ledger. Learn what wallets support XRP and discover the best XRP wallets for beginners and long-term holders in 2026.

What are the Top AI Crypto Coins? Render vs. Akash: 5 Gems Solving the 2026 GPU Crisis

What are the best AI crypto coins for the 2026 cycle? Beyond the hype, we analyze top tokens like RNDR, AKT, and FET that provide real-world solutions to the global GPU shortage and the rise of autonomous agents.

What Is a Token in AI? What Is an AI Token + 3 Gems You Can't Miss in 2026

The era of AI hype has transitioned into an era of utility. As we move through Q2 2026, the market is no longer rewarding "narrative-only" projects. At WEEX Research, we are seeing a massive capital rotation into Decentralized Compute (DePIN) and Autonomous Agent coordination layers. This guide analyzes which AI tokens are capturing institutional liquidity and how to spot high-conviction setups in a maturing market.

Consumer-grade Crypto Global Survey: Users, Revenue, and Track Distribution

The number of active users of consumer-grade encryption has long reached tens of millions, but it is not in the sight of Silicon Valley and New York.

Popular coins

Latest Crypto News

Read more