So, Trump’s in favour of a “total reset” with China, you say? These 3 markets are popping champagne, Bitcoin’s kissing $104,000 and all your neighbors just became geopolitical affair experts! Hold on a second. Hold on a second before mortgaging the house to acquire more Dogecoin — let’s pump the brakes and inject a healthy dose of reality. Unfortunately, this “reset” is likely only a shimmering mirage—particularly if you’re looking at your crypto portfolio.

Fragile Truce, Fleeting Gains?

Remember that "Phase One" trade deal? Promised us the moon, shipped us… something other than the moon. This "total reset" feels suspiciously similar. Trump later characterizes the meeting as “very good.” When you look at it through the lens of the market, it leads to a temporary sugar high instead of a real recovery. Fear Index Today The fear index is down, risk-on is back – sounds amazing, doesn’t it? What occurs when the jubilation wears off and the caveats appear?

Think of it like this: you're at a poker table, and two players who've been at each other's throats suddenly start being polite. Does that mean they're sharing the pot? Doubtful. It is likely an indication that at least one of them is laying the groundwork for a larger subterfuge. China's ambition to be a global superpower hasn't vanished overnight. But the conflicts underneath are still there, just brewing below the surface.

What if Trump isn’t re-elected? How could we possibly ensure that the next president would respect so tenuous and informal comprehension. No.

Digital Yuan Rising, Bitcoin Sinking?

Here’s where it gets interesting and possibly frightening for Bitcoin bulls. Western investors are chomping at the bit for a trade deal. While the U.S. gets distracted, China continues to build out its own digital currency infrastructure in silence. A U.S.-China detente would inadvertently provide China’s digital yuan (e-CNY) with a huge head start. Why? Lessening trade friction through the e-CNY would bring it into wider international use. While not an explicit intent of the change, it has the potential to challenge the dollar’s dominance.

Now, you might be thinking, "So what? Bitcoin's decentralized, it's immune!" But consider this: If the e-CNY becomes a viable alternative to the dollar, it could become a viable alternative to Bitcoin, at least for certain transactions. Now picture a world where international trade is being settled more and more in e-CNY, avoiding the dollar and Bitcoin altogether. That’s a world where Bitcoin’s utility, and thus its price, would suffer a major blow.

On top of all that, let’s remember China’s track record with crypto. They banned Bitcoin mining, remember? A "reset" doesn't erase that history. It would be relatively simple for them to use their new digital currency to make it even more difficult or even illegal to access Bitcoin in their territory.

Regulatory Armageddon Still Looms

Even if the U.S.-China situation suddenly and miraculously resolves itself, the regulatory sword of Damocles still hangs over the entire crypto market. Then, the SEC Crypto Unit signaling the approval of an XRP ETF. But we’re still a long way off from the kind of regulatory certainty that institutional investors continue to look for.

Hedge funds, pension funds, and others may be “watching” the developments unfold, but watching is different from actually committing capital. They want certainty, with real rules of the road before they’re going to pour any significant capital into Bitcoin. And truthfully, regulatory clarity is hardly the forte of any government, ever, anywhere.

Additionally, the threat of government intervention to continue to suppress Bitcoin’s price is always a possibility. Who could forget when Elon Musk tweeted that Tesla had sold most of its Bitcoin? The world’s richest man proved it only took one tweet to send the market into a death spiral. Just think about the impact a well-coordinated, national regulatory crackdown would have.

Well, congratulations on the meteoric rise of Bitcoin. Perhaps this “total reset” will finally deliver a new age of international goodwill and shared wealth. But not on all of the above with your life savings. Consider this an early warning to be on the lookout for these three dangers. For this new era of crypto, as in all of life, always buyer beware. And keep in mind to always bet against the narrative, particularly when everyone is getting swept up in the buzz (and basedbeans!