The rumblings of a trade war between the US and China are now stronger than ever. Donald Trump’s attitude and general demeanor are seemingly angering world leaders, even if it is boosting the markets. Taking his aggression one step further, imposing tariffs on goods from nations across the globe, this is causing many traders and investors to break out in a cold sweat. China appears to be facing the brunt of these tariffs, with the Chinese government even going as far as to accuse the US of starting “the largest trade war in economic history.”
As the world enters a turbulent time as far as trade is concerned, will Bitcoin and the growing cryptocurrency market seize the day and reap the benefits? Analysts appear to be split right down the middle with regards to whether or not this will actually be the case.
Searching for a Market Catalyst
If you speak to three different analysts you’re like to hear three different opinions on Bitcoin’s prospects during any potential trade war scenario. One man that stands by Bitcoin’s potential during a time of economic downturn is BitBull Capital CEO Joe DiPasquale. His recent comments are telling, as he feels that “Bitcoin was forged in the fires of economic uncertainty.” He’s also been quick to emphasize that the roots of Bitcoin came out of public disillusion with the traditional banking system, “It was created in direct response to the shortcomings of the traditional financial system. It makes sense, then, that any event that highlights the potential vulnerabilities of a national currency also tends to magnify the strengths of a borderless currency such as Bitcoin.”
Bitcoin has seen a rather dramatic fall from grace since its December 2017 highs, where it peaked at a staggering $20,000. While there has been something of a revival in recent weeks, Bitcoin is still looking for a major catalyst. DiPasquale feels that a China-America trade war could prove to be that very catalyst, “The uncertainty created by a trade war between the U.S. and China could certainly catalyze Chinese citizens to increase their holdings of Bitcoin and other cryptocurrencies.”
Another crypto voice that shares a similar opinion is Bit.team CEO Anatoly Berdnikov. As the head of a decentralized P2P online cryptocurrency exchange, it’s no wonder that he’s been asked for his opinion on Bitcoin’s current direction. Speaking on the matter, he said that worries over a potential trade war and its threat to Chinese economy are driving Asian traders towards the cryptocurrency market. He also feels that Bitcoin is now “more resilient to inflationary pressures” than ever before, which certainly stands for something.
Not Quite a Blessing in Disguise
Bitcoin could be on the brink of becoming “Digital Gold” according to some, but others are less convinced. Tim Enneking – Crypto Asset Management Managing Director – feels that while a trade war could have an impact, it wouldn’t be a full-blown catalyst for a Bitcoin bull run. He did agree that a trade war could trigger a market shake up, “were a full-scale trade war to break out, in the form of immediate [to] high tariffs, and economies begin to suffer from that, then the effect would be more pronounced.” However, he also said that while he believes that these concerns are a factor, he doesn’t believe that they are a “major catalyst.”
Sean Wish from Redwood City Ventures is also of the belief that Bitcoin needs more than just a China-America trade war to drive up its value. Walsh did concede that it’ll boost Asian interest in the digital currency market, “I suppose the trade war could be driving demand for Bitcoin in certain Asian countries.” Yet, he sees the demand being small, “I suspect that effect is relatively small, as the rationale for buying crypto because of a trade war is not particularly clear or direct.”
Will Bitcoin Soar due to a China-US Trade War?
You are going to hear the term “trade war” thrown around a lot in the coming months – especially as tensions between America and China increase. For Bitcoin, there is potential for this trade war to drive up trade volume and subsequently boost Bitcoin’s value. Doubts linger about the overall impact that this will have on the market-leading crypto, but what’s certain is that it will draw in further interest from Asia and should shift Bitcoin’s price in some capacity.