How will the rising tension between the USA and China affect Bitcoin?
Opportunities for crypto money are growing. Davil Sokulsky, CEO and chief investment officer of the Concentrated Leaders Fund, told CNBC that all leading economies have seen a united front against China on corona virus pandemics.
World leaders, including US President Donald Trump, are seeking to investigate the origins of Xi Jinping’s government on the corona virus outbreak.
Sokulsky said that this last conflict could turn into a new trade war, which could have been much worse than the war between the United States and China last year. Experienced analyst also stated that a serious geopolitical climate will further slow global economic growth:
“THIS IS THE BIGGEST RISK RIGHT NOW. POLITICIANS WILL WANT TO BLAME SOMEONE AS THE PEAKING INFLATION RATES FALL BEHIND. IN THIS CASE, CHINA IS THE CLEAR TARGET TO BLAME. ”
Bitcoin in trading wars
Sokulsky’s comments gave investors working with both China and foreign markets a lot to think about.
Many are afraid of the repetition of 2019’s commercial conflict, which has slowed growth in trade, has shown the biggest drop in oil prices, and the US stock exchanges have changed direction with the whim of Trump’s bumpy tweets.
The trade war last year also caused a significant drop in the value of the Chinese yuan. The currency dropped below the psychologically important $ 7 per unit level, causing a sale in stocks and other risky assets.
In the same week, Bitcoin’s price increased by 35 percent. According to the Business Insider report, Chinese investors flocked to protect from yuan’s devaluation.
With the data received from the media giant, eToro, an online brokerage platform; It revealed that Bitcoin open positions increased by 284 percent during periods when Trump and Xinping challenged each other with short trade prices.
At the same time, open positions in gold markets , a traditional safe haven asset, have increased; it also experienced a modest increase of 73 percent.
The reaction of the markets to the trade war last year; Demand for Bitcoin boomed.
In this year, when the corona virus pandemic has troubled global economic growth and pushed central banks to print money, more and more investors are choosing Bitcoin as a protection against macroeconomic problems and inflation risk.
Therefore, a new global trade war can further accelerate the adoption of the cryptocurrency.