Today, on the fourth of April, China introduced 23% of the USA from the USA. This exacerbated the already intense trade war between the two largest economies in the world.
China’s response to US actions provoked a fall in bitcoin (BTC). Within a few hours, the price of cryptocurrency decreased by 3% to $ 82,000. We understand what will happen next.
Investors are concerned about the escalation of the trade war
Since April 10, China introduces a 34% customs duty on all goods imported from the United States, local media write. This is a response to similar measures of the United States (“mutual duties”), which, according to the Chinese authorities, violate the rules of the World Trade Organization (WTO), undermine the world trading system and worsen the conditions for all market participants.
Initially, Trump announced 20%duties on Chinese goods. This week, the United States added another tariff package, bringing a total rate to 54%.
News about retaliatory measures from Beijing alarmed crypto -investors. The cost of bitcoin decreased by 3% – from $ 84,600 to $ 82,000.
Meanwhile, the ratio of long and short positions on bitcoin fell below 1, which indicates an increase in bear mood. Now sellers prevail in the market.
Other markets reacted. So, the S&P 500 index dropped from 5,260 to 5,250 points, and Jones Industrial Average fell from 41,100 to 40,500 points.
What will happen to bitcoin
In moments of economic uncertainty, the cryptocurrency market usually correlates with the stock-investors record profits and reduce positions in all risk aciates-promotions, cryptocurrency, and raw materials. During the trade war between the United States and China in 2018-2019, the BTC course fell on the escalation of the conflict, but was restored when investors recalled its properties of “digital gold”.
China is the main manufacturer of ASIC Mainers (Bitmain, Microbt). Now that Trump has introduced duties, the cost of delivery of mining equipment will increase significantly. This will greatly reduce the payback for American miners, especially in the States with expensive electricity.
Long -term Persepactives for bitcoin do not look so gloomy. Some analysts believe that protracted trade wars and economic instability can strengthen the attractiveness of BTC as a decentralized asset, which does not depend on the actions of the governments.
If duties lead to inflation and weaken fiat currencies, especially the US dollar, investors can switch to cryptocurrencies.
This point of view is confirmed by time: instability first provokes the fall, but as accepted, it can contribute to growth.
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Source: Cryptocurrency
I am an experienced journalist and writer with a career in the news industry. My focus is on covering Top News stories for World Stock Market, where I provide comprehensive analysis and commentary on markets around the world. I have expertise in writing both long-form articles and shorter pieces that deliver timely, relevant updates to readers.
