Examining How the Ongoing Trade War Between US and China May Have Surged Bitcoin’s Value
At the moment, everyone even remotely connected to the cryptocurrency market is still waiting and hoping that Bitcoin would overcome its current inability to again reach $8,000.
So far, there have been a lot of predictions and analysis on the market in general and as with any other market, these opinions will continue until there’s a notable change in the current flow of the market.
However apart from favourable predictions about the market, a relationship between the U.S. Dollar and the Chinese Yuan, has been noted by Peter Brandt. This relationship might also have something to do with Bitcoin.
Brandt, a popular crypto trader and analyst, recently stated in a tweet, that the U.S. Dollar is now falling against the Chinese Yuan. In the tweet, Brandt says
“It should be noted that the Yuan is on the cheap side of history.”
The comparison made between the USD and the CNY may have stemmed from the “trade war” currently being fought by both countries. However, there is a chance that the recent Bitcoin surge may have been an indirect effect of this war.
US/China Trade War
A while ago, the tension between both giant nations took a very interesting and bold turn. Donald Trump, the U.S. President, shocked the entire world when he mandated that all imports from China would require a 25 perfect tariff, signifying a 15% increase. China has also responded by announcing plans to raise tariffs for all U.S. imports starting on June 1.
This significantly worsened the tension between both countries, causing a lot of discomfort and uncertainty in both financial markets with many Chinese investors becoming very wary about the possibility of devaluation for the Yuan, should the trade war continue. The only way to solve the dependence on the CNY/USD was to move to crypto.
Based on the situation, Bitcoin seemed like the better choice as a more practical hedge due to its decentralization. Since Bitcoin is not being controlled by any government or any one entity for that matter, it was largely immune to the problems that could arise from both countries locking horns. This massive move to Bitcoin may have been one of the major reasons the asset surged impressively.
At the time Brandt made his statement, the USD was slowly falling against the Yuan which is probably why Brandt used the word “cheap”. But now, it would seem that the tables have turned a bit and that the USD is rising slowly again.
Stakeholders Want to End Trade War
The largest manufacturers of footwear have combined efforts to persuade Donald Trump to stop the war against China as soon as possible because of the possible effect on the end customers.
In a joint letter signed by 173 firms, Trump is warned that not only will the tariffs hurt the working class but it will also stifle the growth and development of many businesses. These companies, including Nike, Adidas, Clarks, Dr Martens and Converse, have said that
“it is time to bring this trade war to and end”, also saying that “adding a 25% increase on top of these tariffs would mean some working American families could pay nearly 100% duty on their shoes.”
In a tweet, Trump has urged firms and manufacturers who do business with China to either:
“make your product at home in the USA” or “buy from a non-tariffed country instead of China.”
However, the retailers have said that moving their business to another country might not be that easy.
“Footwear is a very capital-intensive industry, with years of planning required to make sourcing decisions, and companies cannot simply move factories to adjust to these changes.”
Bitcoin’s price is $63,011.64 BTC/USD exchange rate today. The real-time BTC market cap of $1.18 Trillion currently ranks #1 with a chart dominance at 62.37%, daily trading volume of $22.14 Billion and live coin value change of BTC 0.75 in the last 24 hours.