US tariffs on China and cryptocurrencies: Are they the hidden beneficiaries?
In a new escalation, the United States imposed a massive 245% tariff on some Chinese imports, further escalating tensions between the world's two largest economies. The move aims to reduce dependence on China and protect American industries, but it is creating ripple effects across the global economy—one of the most affected areas is cryptocurrencies.
Why can cryptocurrencies benefit you?
Loss of confidence in traditional currencies: When governments engage in trade wars, investors begin to doubt the stability of the dollar and yuan, prompting them to turn to safer alternatives, such as Bitcoin and Ethereum.
Capital flight: With increasing restrictions and taxes, there is a possibility that Chinese capital will attempt to move outside the traditional financial system, possibly through digital currencies to evade censorship and sanctions.
The Shift to Decentralization: Amidst the tensions in international politics, the appeal of decentralized currencies, not controlled by any single state, is emerging as a means of securing assets and protecting them from political volatility.
But, there are risks too:
Governments may respond by tightening laws on cryptocurrencies.
The high volatility of these currencies may scare some traditional investors.
The result?
Cryptocurrencies may be among the biggest beneficiaries in the short term, as a store of value or a means of financial escape, but their future will depend on government responses and market regulation.