The US-China trade saga is intensifying that just might turn into a full-blown trade war as both the countries announces 25% tariff each. In the meantime, fiat currencies like Pound and Euro are taking a hit. Though Bitcoin is currently registering losses, in the long term, these scenarios can drive investors into the crypto market.
US-China trade war saga intensifies
The trade war between US and China is feared to transform into a full-blown trade war as it keeps on getting messier and messier. One of the two biggest economies in the world, both the countries have started to feel the effects of this heated trade war but a stop to this doesn’t seem to be coming at least for now.
As per the latest developments, Trump has announced another set of tariffs on Chinese products. From August 23, the United States will start imposing 25% tariffs on $16 billion worth of Chinese imports.
According to the Chinese government, coal, crude oil, diesel are among the products that have been affected. However, China is all set to retaliate by imposing a 25% tariff on US goods that will go into effect the same day as of US i.e. August 23.
With the way tariffs are being imposed, things are only going to get worse. The US officials are reportedly already planning to levy tariffs on another $200 billion of Chinese products next month, i.e. September.
Pound drops down, euro takes a hit as well
In more than nine months, Pound has fallen down to its lowest against Euro amidst the growing concern of UK leaving European Union (EU). The fear has Pound falling and being left vulnerable to the downward slide.
Pound vs US Dollar has been at $1.286 which is its 11-month low. GBPUSD is expected to remain bearish as per the technical view as it trades below 1.3000 level. The Pound is likely to stay depressed, at least until the second quarter GDP report of UK is released on Friday. Appreciating Dollar and the uncertainty around Brexit is controlling the gains of Pound.
As for EURUSD, the medium to long-term outlook is bearish for this pair. The divergence of monetary policy between European Central Bank and the Federal Reserve will be driving the bears.
Could it be a good thing for Bitcoin?
Bitcoin has also taken a hit and dropped below $6,500 level. The technical picture shows Bitcoin under pressure where it is struggling to maintain its support at $6,480. If the bears remain, they could tumble the bitcoin price below $6,000 mark.
However, there is no certainty regarding bitcoin price movement. Also, with the fiat currencies, pound, euro, rial and others around the world devaluing and US-China trade war intensifying, these scenarios just might drive mainstream investors into bitcoin and other cryptocurrencies. As awareness and adoption of crypto market expand, the outlook might not change in the short term but is most likely to hit in the long term.
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
Having a background in writing, I worked on a wide array of industry topics and have recently entered the world of Blockchain and Cryptocurrency.