Recently, the global trade war has been heating up, with major economic players like the U.S., EU, and China imposing tariffs on each other and restricting trade. It resembles children fighting over toys. But this isn't just child's play; the escalation of the trade war could significantly impact our crypto market. Let's talk plainly about this today.
I. How Intense is the 'Gunpowder Smell' of the Trade War?
Recently, the news has been full of tariffs and trade barriers. What's going on? Simply put, countries are raising taxes and setting thresholds on imported goods to 'protect their own'. For example, the U.S. has imposed a 25% tariff on EU steel, and the EU is retaliating against U.S. whiskey and motorcycles. China has also imposed tariffs on some U.S. goods and restricted rare earth exports. This situation resembles neighbors having a spat and blocking each other's doors.
Why do we need to fight a trade war?
Countries feel that their industries are being 'bullied'. For example, the United States thinks that Chinese goods are too cheap and are taking jobs away, while China believes that the U.S. technology blockade is unfair. As tensions rise, tariff policies become a 'weapon'.
II. The Crypto Market is 'Caught in the Crossfire'.
The trade war seems unrelated to cryptocurrencies, but the global financial market is like a big net; a disturbance in one corner shakes the entire net.
Investors are 'panicking', and cryptocurrencies are being sold off.
As the trade war escalates → global economic uncertainty increases → investors fear that their money will depreciate and begin to sell off risk assets. As an emerging investment, cryptocurrencies are already highly volatile, and with any slight disturbance, prices can easily go on a 'roller coaster'. For instance, Bitcoin's price once plummeted due to news from the trade war, causing investors to be liquidated and faint in the restroom.
The global supply chain is 'stuck', businesses are struggling, and the crypto market is also 'catching a cold'.
The trade war leads to increased costs and reduced profits for multinational corporations, even resulting in layoffs and closures. If businesses are having a hard time and employees' incomes are decreasing, who still has spare money to invest in cryptocurrencies? When market confidence collapses, cryptocurrency prices naturally come under pressure.
Policies 'change faster than flipping a book', regulatory risks are increasing.
In the context of the trade war, countries may strengthen economic controls, and regulatory policies on cryptocurrencies may also 'change faces'. For example, if the U.S. suddenly decides to tighten regulations on crypto trading, the market could instantly 'cool down'. Policy uncertainty makes investors hesitant to invest heavily.
III. The 'Self-Rescue Guide' for the Crypto Market.
Short-term: Buckle up and invest cautiously.
During the trade war, cryptocurrency prices are highly volatile. New investors shouldn't blindly try to catch the bottom, and experienced investors should also control their positions. It's like driving in heavy rain; slowing down and being cautious is the safest approach.
Long-term: Focus on the value of 'safe havens'.
Although cryptocurrencies are being 'wrongly killed' in the short term, some institutions believe that if the global economy worsens, cryptocurrencies may become safe-haven assets. After all, the total supply of Bitcoin is limited, unlike traditional currencies which may be over-issued and devalued.
Keep a Close Eye on Policy 'Barometers'.
The direction of the trade war and regulatory policies from various countries have a significant impact on the crypto market. For instance, if the U.S. relaxes crypto regulations, the market may 'revive'; conversely, if restrictions are tightened, prices may continue to 'stay flat'.
IV. The Future: Will the Trade War 'Cool Down' and Can the Crypto Market 'Turn Around'?
If countries calm down and resolve trade disputes through negotiations, and the global economy recovers, the crypto market may welcome a spring. After all, the technical advantages of cryptocurrencies (such as decentralization and transaction transparency) remain, and institutional funds are gradually entering the market.
However, if the trade war continues to escalate and the global economy falls into recession, the crypto market may face 'further woes'. After all, if people can't even afford food, who cares about virtual currencies?
Summary:
The global trade war is like an 'economic storm'; the crypto market finds it hard to stay unscathed. Short-term fluctuations are inevitable, but long-term value depends on technological development and global economic trends. For ordinary investors like us, it's important to learn more, follow less, invest with spare money, and maintain a stable mindset to earn steadily.
I am Wenbin. If you want to delve into the crypto space but can't find direction, or if you want to quickly get started and understand information gaps, follow me for first-hand information and in-depth analysis!
