Bitcoin Tensions are Rising Again Between the US and China; Will This Boost Bitcoin?
Cole Petersen | May 22, 2020 | 18:00
- The US and China are once again seeing heightened tensions amidst a new push by the Chinese government to grab power within Hong Kong
- The Chinese President is now noting that he feels “threatened” by comments made by the US President, and it does appear that these tensions could soon escalate further
- This comes as investors are largely fleeing assets that could be impacted by further economic turmoil
- Bitcoin could be the big winner of all this, as the cryptocurrency has largely gained status as a “safe haven” asset due to its positive price action seen throughout the past several months
Tensions are rising again between two of the world’s most powerful countries, and it could give Bitcoin a much-needed boost.
China is once again attempting to assert authority over Hong Kong, sparking another bout of protests from concerned HK citizens.
Chinese President Xi Jinping even stated that his country will do what it wants with Hong Kong, not considering what the consequences could be.
This seems to signal that previously easing tensions between the US and China will begin growing again, potentially having implications for the recently passed trade deal and the economy as a whole.
Bitcoin’s newfound status as a safe haven asset – should it maintain it – could mean that this turbulence will give it a boost, as citizens of both countries may turn to it as they flee fiat currencies bound to be impacted by political tensions.
Hong Kong Kindles Resurgence of Tensions Between the US and China
Throughout the early part of Trump’s Presidency, his long-negotiated trade deal with China slightly tempered the growth seen by the U.S. markets.
Once a deal was agreed upon, however, equities began rallying hard in a move that was only halted by the Coronavirus pandemic.
It now appears that the economic weakness stemming from a virtually frozen global economy may be perpetuated by renewed tensions with China, as Xi Jinping is now noting that his government will do as it wants with China, not being concerned about potential consequences.
Renewed US-China Tensions to Boost Bitcoin’s Safe Haven Status
Bitcoin’s status as a safe haven asset may be boosted by these renewed tensions.
Although the cryptocurrency was firmly tracking the equities market throughout the early part of the year, it has since broken this correlation as individuals across the world begin turning to it in order to escape the inflation caused by widespread money printing.
Furthermore, because economic tensions – like that seen between the US and China – can have dire implications for the fiat currencies involved, individuals may move to gain exposure to Bitcoin in an attempt to escape any fiat volatility.
Featured image from Shutterstock.
