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  • Tue, Jul 10, 2018 The global trade war continues to escalate, and Bitcoin will be a safe-haven asset or will shine

    blockchain_meme


    The continuous escalation of the global trade war has already caused an impact on the global economy, causing a lot of uncertainty. However, the crisis has also highlighted the advantages of Bitcoin – anti-inflation and hedging as a hedge asset. Preparing for a "Comprehensive Trade War" US President Trump's trade war with China, Europe and other countries seems inevitable and seems to have just begun. In fact, China believes that the United States has triggered "the biggest trade war in economic history." The Wall Street Journal reported: "President Xi Jinping has instructed governments at all levels to prepare for a comprehensive trade war."

    According to David Dollar, a Chinese scholar at the Brookings Institution, "a strong economy will make the United States less likely to feel any direct economic pressure from the trade war." However, some of the side effects of the trade war are creating uncertainty. It also began to manifest itself. Apple CEO Timothy D. Cook is very worried about the risks that the trade war has brought to the company. He frequently meets with the leaders of China and the United States and calls on both parties to remain calm. The New York Times wrote: "Apple has 41 directly operated stores in China and sold hundreds of millions of iPhones. It can be said that no American company in China can be as successful and high-profile as Apple, and it has become a goal that many companies are striving to catch up with. ."

    At the same time, American farmers are now aware of the extent to which tariffs can harm them. In this regard, the United States Soybean Association (ASA) Chairman John Heisdorffer said in a statement: "It is actually very simple to calculate. You can impose a 25% tax on soybean exports, and you can cause serious damage to American farmers."

    On the other hand, due to US tariffs on steel and aluminum, the EU has imposed import duties on US goods valued at $3.25 billion. In fact, since President Trump threatened to impose tariffs, the whole of Europe has been hit by this uncertainty – in Germany, business confidence has fallen for six months in the past seven months. Protective hedge assets – Bitcoin history shows that investors will turn to safe-haven currencies to minimize the risk of wealth loss due to economic uncertainty and the erosion of inflation.

    According to Nevil Gibson of the National Business Review, the CPI inflation data, which will be released on July 12, may indicate that the inflation rate is close to 3% – “the highest level in the past decade”. Hedge fund manager Brian Kelly asserts that during the trade war, the value of money will fall and commodity prices will rise. So, Kelly suggests that you should hold hard assets. Indeed, "in this environment," Kelly said to CNBC: "I want to have some deflation and fixed supply in an inflationary environment. See how Bitcoin has performed in the past few days."

    As a result, investors who are frightened by inflation are likely to turn to hard assets like Bitcoin, mainly because they are anti-inflation. In fact, Bitcoin has an inherent resistance to inflation – because the total amount of Bitcoin is only 21 million. The last bitcoin will appear in 2040.