For months, the economic war between the US and China seems to have gained more momentum, which each side imposing sanctions on the other. Recent trade talks between Beijing and Washington seem to have gone south, although US President Donald Trump termed them as “constructive.” However, he went ahead to announce new tariffs to be imposed on Chinese imports just hours after the talks.
Stocks Are Crumbling
The trade war has left lots of economic damages in its wake, with the most recent casualty being the stock market.
Donald Trump’s announcement on Thursday sent shockwaves across the stock market, sending most of the S&P sectors to the red zone. In France, CAC lost 3% on Monday. Germany’s DAX lost by the same margin.
Bitcoin As A Safe Haven
The interesting fact is that despite others like Indices and stock markets getting hard-hit, cryptocurrencies and Gold have remained relatively stable. In fact, Bitcoin seemed to surge right after the US announced further sanctions targeting electronics imported from China.
The persisting war has led many, especially in China to turn to cryptocurrencies as an alternative store of value especially now that the Chinese Yuan is depreciating against the USD.
In that sense, many Chinese investors have sought to shift their investments from vulnerable stocks to cryptocurrencies. In this, Bitcoin has gained tremendously as more money flows into its market.
Also, the fact that cryptocurrencies, especially Bitcoin, are largely decentralized and technically immune to geo-political and economic shock-waves has lent further credence to the legitimacy of cryptocurrency as a viable and incorruptible store of value.
As a result, Bitcoin has gained both in value and adoption as more people favor it over other means. This is likely to increase the crypto’s demand and ultimately influence its price upwards. If this continues, Bitcoin could soon top its earlier high of $13k and possibly break the 2017 record of $20,000.