The US-China trade war has spilled over to other nations as well and further turning into currency war as China devalues its currency. Investors especially rich people are turning to Bitcoin instead of gold as a long-term option.
US-China trade war over worldwide
The trade spat might have started between US-China, but today it has reached across the globe and affecting other countries as well. From Japan, South Korea, and other Asian markets to EU, the rest of the world can feel the heat as well. This will, for one thing, going to make some major shifts between the world’s economies and trading partners.
Both the countries are feeling the effects of the ongoing trade war, on one side US farmers are getting hit while on the other side, China’s growth is expected to be affected if not it’s employment and manufacturing. Though both the countries have great economic power, this dispute won’t be sustainable and given the pace at which it is going on, we might be seeing a resolution coming very soon.
Not just trade war, a currency war is also ensuing in both the economies. US President Donald Trump has always been vocal and favorable towards weakening the US dollar in order to make it hard for other economies to enter the US market. The current trade war that is turning into a currency war has the Chinese government devaluing its currency and lowering interest rates to get an edge over the US. Since January, Yuan has fallen about 15 percent against Dollar.
A few days back, Trump tweeted:
“China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars gets stronger and stronger with each passing day – taking away our big competitive edge. As usual, not a level playing field…”
Bitcoin: Counter-move to Trade War
While this trade and currency war is going on, this is turning people towards bitcoin which during this period has skyrocketed. In the last two weeks, Bitcoin surged over 30 percent and the entire crypto market also saw a hike in prices.
As the native currency devalues, rich people, turn towards the safest investment mode which is currently served by Bitcoin. If the trade war continues, Bitcoin price is expected to even hit higher numbers as people swap their currencies for Bitcoin.
Lately, Bitcoin is also seen as a preferable option over gold. Referred as the “digital gold”, it is more convenient than gold as well. Experts like ADVFN CEO, Clem Chambers believe Bitcoin might rise even above the gold standard. Traditionally people used to move towards gold, but today Bitcoin offers better profit potential and value in the long term.
Bitcoin is becoming the first choice of the rich people now instead of gold as a hedge move to currency devaluation. We just might be in for a significant shift if this trade war heats up even more and Bitcoin must see its bull rally get into full effect.
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Having a background in writing, I worked on a wide array of industry topics and have recently entered the world of Blockchain and Cryptocurrency.