The tit-for-tat trade escalation between China and the United States once again reverberated throughout global financial markets and cryptocurrencies on Wednesday — but prices surged this time.

Bitcoin jumped 5% in minutes to trade above $81,000 as President Trump responded to China's escalation by increasing tariffs on the Asian giant to 125%. The largest cryptocurrency by market cap had dropped below the $80,000 mark following the implementation of the president's tariff plans on Sunday, April 6.

In the same beat, Trump announced a 90-day pause for import duties on other countries and reduced reciprocal tariffs to 10% in the interim. "Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately," Trump wrote on Truth Social, a social media platform he owns.

"I have authorized a 90-day PAUSE and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately," the President added, noting that over 75 countries had engaged the U.S. in commerce negotiations.

Crypto markets and equities immediately skyrocketed following the news. Ether flew 7% to hit $1,580, according to The Block's price page. Major altcoins like Solana and XRP posted double-digit bounces as the total cryptocurrency market flipped green, rising above $2.6 trillion. The GMCI 30 recorded an 8% uptick as the top 30 digital currencies by market cap soared, according to The Block’s data page. Data from Yahoo Finance showed similar price action in U.S. markets. The S&P 500, DOW Jones, Nasdaq, and Russell 2000 all rose more than 5% shortly after President Trump's post.

Dr Kirill Kretov, senior automation expert at CoinPanel, told The Block that bitcoin and crypto’s amped volatility was unsurprising, considering sudden price swings in more established markets. "Even traditional markets are behaving like memecoins," Kretov said. "Just look at the recent S&P 500 spike of +8% on fake news, followed by a -3.5% correction within minutes. If that’s the new normal for tradfi, why would we expect bitcoin to behave differently? Especially with how thin and easily moved the crypto market is right now."

Minutes from the March Federal Open Market Committee meeting to be released Wednesday afternoon may spark a market recovery, Darren Chu, contributing analyst at BRN, had said before Trump's latest jab at China. Also, Thursday’s Consumer Price Index and Friday’s Produce Price Index data could offer a clearer picture of U.S. inflation, which are key factors for the Federal Reserve’s future decisions on monetary policy.

"Odds are moderate and rising for a multi-day to multi-week Dead Cat Bounce to begin as early as today 2 pm EST with the release of the US FOMC meeting minutes, or by Thursday with the US CPI and unemployment claims, or Friday with the US PPI and preliminary UoM consumer sentiment and inflation expectations," Chu said.

U.S. Federal Reserve Chairman Jerome Powell previously said the central bank would respond to hard data rather than sentiment and was in no rush to pivot its policy stance. Powell also cautioned President Trump’s tariff maneuvers, warning that economic repercussions like higher inflation and cooling growth rates might arise.

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