On April 8, VanEck, the well-known investment management firm, released a report showing that Beijing and the Russian government were leaning towards cryptocurrency to make international trade.
China and Russia, according to the report, were using Bitcoin for energy transactions, as a result of the escalating global trade tensions, particularly following the Trump administration’s recent tariff package targeting imports from China and other nations, announced on April 2.
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Expanding beyond bilateral trade
Matthew Sigel, Head of Digital Assets Research at VanEck, commented on the trend, stating that “interest in Bitcoin as a settlement mechanism is becoming less speculative.” He elaborated in the report that “China and Russia have reportedly begun settling some energy transactions in Bitcoin and other digital assets.”
The VanEck report further showed that Bolivia has joined this trend, announcing its intentions to import electricity using cryptocurrency. Likewise, French energy provider EDF is reportedly exploring the possibility of engaging in Bitcoin mining using its surplus electricity, which it currently exports to Germany.
“That interest is no longer theoretical,” Sigel emphasised, underscoring the tangible nature of these developments. VanEck’s analysis positions these events within a larger context of digital assets gaining traction in global trade, particularly among nations seeking alternatives to the established U.S.-dominated financial infrastructure.
Meanwhile, using digital assets to settle transactions could signify a strategic move by some countries to diversify their trade and payment systems.
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Investor sentiment and market signals
Also, investors are closely monitoring the Federal Reserve’s stance, as noted in the report. Historically, “dovish turns in interest rate expectations and rising liquidity conditions have historically buoyed Bitcoin performance,” Sigel added. Furthermore, the U.S. Dollar Index (DXY) is being observed as a crucial indicator, with “persistent dollar weakness may bolster Bitcoin as a macro hedge.”
Despite a recent increase in 10-year Treasury yields on April 7, “Bitcoin’s muted response indicates decreased sensitivity to traditional macro headwinds.” Data also reveals that “U.S.-listed spot Bitcoin ETPs are also net positive by around $600 million in the year, and inflows recommenced at the end of March.”
The report suggests that “on-chain activity and possible retaliatory measures from China or the EU to circumvent dollar-based systems” could serve as an opportunity for further adoption of cryptocurrencies in international trade.