Recent developments on global markets, including tariffs imposed by Trump, have led to a significant drop in Bitcoin's value. Amidst this, the key question remains: can risky assets survive under the current conditions?
Impact of Trade War on Crypto Market
The ongoing U.S.-China trade war is hitting the crypto market hard, with Bitcoin losing over 6% of its market share, resulting in the wiping of trillions of dollars. Meanwhile, Gold (XAU) surged over 3% weekly, reaching a new all-time high. The U.S. dollar index has also soared due to the 10% tariff on Chinese imports, causing investors to seek safer bonds due to fears of an interest rate hike.
Bitcoin's Value Decline
Bitcoin has experienced a significant drop, losing trillions within a week. This is attributed to the high-stake tariffs imposed on three of the U.S.'s most significant import partners.
Bitcoin's Potential to Withstand Pressure
During Trump's first term as President, the U.S.-China trade war escalated significantly. This led to a major 72% drop in Bitcoin, closing the year at $3,740 in 2018. However, U.S. imports from China have reduced by 8 percentage points since then, accounting for just 13.5% of total imports. Bitcoin consistently gains momentum as a 'safe haven' despite the increased investment risk. Institutional capital is expected to help absorb the pressure.
Current economic conditions and Trump's policies continue to pressure Bitcoin and other risky assets. However, 2025 is anticipated to be a critical test for Bitcoin's status as a safe haven.
