Trump’s trade policy has dominated the headlines in recent weeks, with his most recent step lifting rates on almost every country in the world. Trump himself has said that production and economic prosperity will bring back to the US. Proponents claim that the extra income will yield for the government, but opponents say it will increase prices and that it is consumers who will eventually pay the price in the form of higher prices.
The role of cryptocurrency
Cryptocurrency is invoiced as a hedge against market turbulence. The cryptom markets also tend to flourish in times of high inflation. To take advantage, users must buy or exchange crypto with fairs or directly from third parties before they store their companies. The Best ERC20 wallet Can be used to save ether, as well as coins and tokens developed on the Ethereum network. Users can also follow their coin and token performance and at the same time make payments quickly and seamlessly using the wallet.
What Trump did
Trump has long declared himself a fan of rates. In January he said: “Rates are the most beautiful word for me” during his inauguration day speech. And he has been faithful to his word, initially threatening and withdrawing rates against countries such as Canada and Mexico, before he finally performs taxes. This week Trump started baseline rates for almost every country in the world, starting at 10%. Some countries are now struck by Cumulative rates as high as 50% Or more.
The effects so far
Until now, the global stock markets have suffered considerable drops, while the US dollar refueled on the announcement. Bitcoin, despite being considered a good investment in times of turbulence, also underwent price decreases immediately after the announcement of Trump with the prices that fall around 4% in the 24 -hour launch of the rate.
The so -called mutual rates were announced on April 2, when Bitcoin traded at around $ 87,000. The prices initially fell to $ 82,500 and since then between $ 81,500 and $ 84,500 varied. The price of BTC is currently around $ 83,000. Although Bitcoin’s prices have fallen, they have not been as bad as stock markets or even the US dollar, on the market.
Looking beyond pure prices, the total market value has suffered. 24 hours after the rates were announced, the total market capitalization of cryptocurrency was $ 2.75 trillion, which fell by 6% in the 24 hours.
Crypto -Share prices
Crypto shares also fell after the announcement. Coinbase fell almost 8%, while mining companies Mara Holdings (8.3%), rioters (8.7%) and bitfarms (5%) also shoot value. Miners may be one of the most difficult affected, according to these latest taxes.
Most mining equipment is manufactured and imported from China in the US, and China is the hardest affected by the new reimbursements with a combined 54% that is now being levied against products from the country. Taiwan and South Korea also produce some of the most sought after mine chips, and these countries were hit by 32% and 25% rates respectively.
Trump on crypto
Trump has previously promised to make the Bitcoin my capital of the world from the US, even though they have earlier Bitcoin described as a scam. His rates, however, seem to be contrary to his latest crypto promises.
According to experts, the new charges will lead to institutional investors, who are those with the deepest pockets, to leave companies led by the US. This means that they will be more inclined to invest in crypto companies from other regions. And despite promises to his Multi billion dollar election campaign-backers From the cryptomarkt, Trump is not exactly with fine details.
There have been promises from Bitcoin strategic reserves, but apart from the US no longer seized Cryptocurrency assets, there is no more information.
The start of a trade war
Trump’s mutual rates are not considered mutual by the rest of the world. As such, many countries already emphasize their own retribution rates and this seems to be at the start of a global trade war. A trade war will cause uncertainty in all markets and in the short term most investors will probably move their investments to safer, stable alternatives.
Bonds, and even cash, will become more popular in the coming months. In the long term, however, increased volatility on traditional stock markets can play in favor of cryptocurrency. What is more, if the price increases are passed on to consumers, which seems very likely, this will probably lead to higher inflation. Bitcoin can enjoy price increases during the inflation shock. Since investors probably expect an increase in inflation, there is no shock.
Uncertainty looms
In reality, few people are sure what will happen after the introduction of Trump’s rates. The move is unprecedented and markets have never experienced anything like that. Trump himself believes that at least in the US shares will eventually flower in the US. He believes that a reduction in trade deficits means that more people will buy us goods, and this will lead to higher profit for American companies. In turn, employees are paid more.
Until now, the cryptocurrency market has responded in the same way to stock markets and even financial markets, suggesting A certain degree of maturity We didn’t really see it in web 3.0.
It seems very likely that companies that are highly dependent on Chinese input, and imports from other countries with high levies will suffer, but this will not necessarily be transferred from shares to crypto coins. Crypto could benefit in the long term, because investors are looking for ways to cover themselves against inflation through alternative investments.
Next movements
Markets will probably continue to fluctuate in the coming weeks. The EU has suggested that it will respond with rates on the US, which will launch in mid -April. Even the UK, which saw the lowest rates of all countries and has so far avoided the threatening retaliation measures, has drawn up a list of hundreds of American products that can be taxed if the two countries cannot reach a useful trade agreement.
Main image Source: Infativate
