The escalating trade tensions between the U.S. and China have led to a cautious sentiment in the crypto markets, impacting Bitcoin's price. China's imposition of retaliatory tariffs on U.S. products has reignited fears among investors, prompting a pullback in Bitcoin as traders seek safer investments amid the ongoing trade war. Additionally, a decline in open interest in Bitcoin futures contracts suggests a more cautious stance among institutional investors. The anticipation of a press conference by David Sacks, the AI and crypto czar, has further contributed to market volatility, as traders await potential regulatory changes and the approval of crypto exchange-traded funds.
The Proshares Ultrashort Bitcoin ETF (SBIT) has responded to these developments, rising 1.88% to $9.77 as of 2:40 PM on Tuesday, February 4.