US President Donald Trump sent shockwaves around the globe after imposing 25 percent tariffs on Chinese imports. The heightened tensions between the two economic superpowers made the US stock market enter meltdown mode, but Bitcoin stayed above the fray.
Bitcoin as a hedge asset
While everyone is arguing about who’s going to benefit from the ongoing trade war, Bitcoin is shaping up to be a clear winner. The decentralized cryptocurrency, which is not controlled by any government, has proven itself to be a viable hedge asset during the times of financial instability.
According to Investing.com’s Jesse Cohen, Asian investors who were caught off guard by the tariffs decided to jump into crypto.
While it is hard to point at exactly what has caused the latest spike in Bitcoin prices, it’s not that far-fetched that investors, mostly in Asia, have turned to the cryptocurrency as a hedge against global political volatility arising from the ongoing trade war between Washington and Beijing,” Cohen suggested as the reason behind the BTC rally.
It started in Japan
Before China became the main target of his campaign, Trump criticized Japan for ‘ripping off’ the US economy after the Nikkei infamously crashed during the late 1980s.
As reported by U.Today, UBS analysts predicted that Bitcoin could perform similarly to other bubbles, meaning that it might not retest its ATH ever again (the Nikkei is currently about 50 percent below its ATH).
deVere Group CEO Nigel Green is certain that Bitcoin isn’t likely to reach its current peak of $20,000, but he also predicts ‘steady rises’ due to growing public awareness about Bitcoin.