How Cryptocurrency will React to a Possible Trade War?
The escalation of the conflict between the U.S. and China can strengthen the position of Bitcoin, as happened in 2019. A trade war can cause a decrease in the correlation between cryptocurrency quotes and the S&P500 index. The reason is that under such conditions, Asian market participants are actively investing in digital assets, using them as protective or to circumvent sanctions. According to his forecasts, if the tension in the political arena will increase, then BTC could rise in price to $12,000.
Bitcoin rose to $14,000 last year during the US trade conflict with China. Probably, this time a violation of relations between countries will also contribute to the rise in the price of coins. Last year, at the height of the trade war, the price of bitcoin was rising. He went up to $14,000, demonstrating the properties of a protective asset.
There is no reason to believe that this year BTC will behave differently, especially since fundamentally there are many positive aspects to the cryptocurrency market. Among the most relevant factors, we can single out the permission of the OKex and Huobi exchanges from the Chinese financial authorities to provide services to Chinese citizens. This, of course, will lead to a surge in the activity of Chinese traders and the arrival of new participants to the cryptocurrency market, which will bring fresh liquidity to bitcoin and altcoins.