When will Thucydides' trap activate? How does the American-Chinese rivalry threaten to freeze the crypto markets

World analysts have recently observed a disturbing pattern: if we recall the classical Greek period, the current clash between superpowers is beginning to resemble a scenario that financial experts should recognize. DeepSeek, a Chinese AI startup, demonstrated that the technological gap between Washington and Beijing is narrowing faster than Washington expected. This has triggered a chain of events that could end with the worst-case scenario for portfolios.

Allison and his warning pattern: 75 percent chance of conflict

American strategic analyst Graham Allison introduced a concept called the Thucydides Trap. It is a historical pattern where a dominant power and a rising rival threaten each other’s existence. Allison studied 16 similar cases in modern history and found that 12 of them ended in open conflict. This means a three-quarters probability that the US and China will come into direct confrontation.

It’s not just a theoretical exercise. The Trump administration is responding to Chinese technological progress precisely according to Allison’s model: tariffs, embargoes, access restrictions. Google, which China kicked out of its marketplace years ago, is now under antitrust investigation – a clear signal that Beijing has a long memory and short patience.

Trade wars as a testing ground

Market freezes begin with trade clashes, not bombs. Every tariff announced by decree on the American side provokes a retaliatory gesture from China. The supply chain connecting both economies gradually paralyzes. Factories in Asia slow down, logistical costs rise, and consumer prices increase.

In such an environment, capital behaves like a frightened animal. Risk assets – including cryptocurrencies – are the first to seek safety. Money flows out of tokens and altcoins, seeking refuge in cash and traditional instruments. It’s not panic; it’s cold calculation.

Cryptocurrency cycle vs. geopolitical reality

The original idea was that crypto markets develop according to their own rules – halving, sentiment, institutional entry. But the Thucydides Trap shows that macroeconomic events will take their share. When global trade stalls, unemployment rises, and households prepare for harder times, money flows out of experiments and into more conservative havens.

The worst case is when conflict spills over into the financial sector. That’s where talk of winter begins – not meteorological, but market winter. Liquidity withdraws, borrowing becomes expensive and risky. Bitcoin and the remaining markets find themselves in conditions reminiscent of 2018 or 2020.

When will the Thucydides Trap close?

The question is: will Trump and Xi Jinping be able to agree on concessions? Allison claims that it is possible in history, but it requires the willingness of both sides to give up some goals. Every day that uncertainty persists reduces market confidence and increases the cost of capital.

For cryptocurrency holders, there is a clear message: prepare for a scenario where winter is brought by geopolitics, not just the cycle. This higher volatility and risk are now part of the game.