Where Bitcoin to Go following Donald Trump’s Chinese Tariff Threat
Bitcoin has seen its price moving close to $6,000, remaining unaffected by the U.S. president Donald Trump’s Chinese Tariff threat which has led global assets especially stocks in red chaos.
Despite the widespread assumption that trade talks are progressing smoothly and the bilateral negotiations between China and the U.S. are close to reaching a deal, Trump tweeted on Sunday revealing his intention to increase tariffs on Chinese goods from 10 per cent to 25 per cent on this Friday.
The Chinese markets have been in an uproar on hearing that. The Chinese stocks took an immediate beating with the SSE Composite Index (mainland China) and Hang Seng (Hong Kong) together with TAIEX Index (Taiwan) suffering steep drop after opening on Monday morning, leading billions of dollars of wealth wiped in a few hours.
Shanghai Composite Index lost over 5% in two hours after open
Chinese meme showing Trump as Thanos from the Avengers: “Move my fingers, wipe out half of the Chinese investors.”
Though bitcoin also saw a dive in price during the same time frame, the largest cryptocurrency bounced back soon and has seen a dramatic increase since this morning. Many Chinese crypto investors see it a bullish signal for bitcoin and jokingly ask stock traders to put their money into crypto.
Many would correlate cryptos to the traditional stock market when there’s big news on either asset, while the two assets are not so correlated. According to Anthony Pompliano, founder and partner at Morgan Creek Digital,
“If you look at the correlation between digital assets and the S&P 500 over the last 180 days, it’s at zero. If you look at it compared to the dollar index, it’s near zero. It has proven to be non-correlated, and I expect that to continue.”
So what’s behind bitcoin’s strong bullish rally? It is highly likely driven by the reports that the $7 trillion investment firm Fidelity is about to roll out bitcoin trading for institutional clients in the coming weeks; In addition, a senior official at the U.S. Commodity Futures Trading Commission (CFTC) told CoinDesk that they are ready to approve an Ethereum futures contract.
As of press time, bitcoin is trading at $5,931, showing a gain of 4.38% in the past 24 hours; the second largest cryptocurrency ETH finally sprang back to life, surging nearly 10% within 24 hours.