The trade war between the US and China initiated by Donald Trump creates volatility in the cryptocurrency market, including Bitcoin. Despite the negative consequences, some analysts believe this may open new opportunities for investors.
Crypto Market and Trade War
Since its peak in January, Bitcoin has lost over half a trillion dollars in market cap, largely due to fears surrounding Trump’s trade war. On April 8, BitMEX co-founder Arthur Hayes suggested that these tariffs could have a hidden positive effect on BTC.
CITE_W_A: "If not the Fed then the PBOC will give us the yachtzee ingredients."
How China Influences Bitcoin’s Price
China has historically been a significant market for Bitcoin. In 2013 and 2015, there were spikes in Bitcoin interest due to the yuan's devaluation. In April 2023, the yuan reached record lows, and many see Bitcoin as a hedge against inflation. For instance, in 2015, after the yuan's devaluation, Bitcoin surged from $200 to $500 by November.
Alternative Hedge Tools in China
Despite the interest in Bitcoin, Chinese investors are also turning to other inflation hedges, including gold. However, legal uncertainties and strict regulations in the country may hinder ordinary investors from acquiring Bitcoin.
Trump's trade war creates instability in the cryptocurrency market, but analysts like Arthur Hayes point to potential opportunities arising from yuan devaluation and interest in Bitcoin.
