The US President, Donald Trump, has said that he would impose a 10 percent tariff on a total of $300 billion worth of Chinese goods. Hence, the trade tension between Washington and Beijing continues to boil. This had an immediate effect on traditional markets, most of which tumbled in response, as investors are seemingly turning to Bitcoin and gold as a hedge.
Trump Does It Again
In a thread of tweets, the US President, Donald J, Trump, revealed that he will place yet another 10% tariff on the remaining $300 billion of goods and products which come from China into the US.
He said that US representatives who had just returned from China where they had “constructive talks” in regard to the future Trade Deal between the two largest economies in the world. However, according to Trump, China failed to live up to its promises from before and didn’t buy agricultural products from the US in large quantities. Moreover, the country continues to sell Fentanyl to the US because of which “many Americans continue to die,” the president says.
…during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country. This does not include the 250 Billion Dollars already Tariffed at 25%…
— Donald J. Trump (@realDonaldTrump) August 1, 2019
It’s also worth noting that the US already charged another $250 billion worth of Chinese goods with a 25% tariff and the latest taxation does not include that.
In response, traditional markets tumbled. The S&P 500 lost upwards of 60 points shortly after the news broke out.
Additionally, the Dow Jones Industrial Average (DJI) also tumbled, losing more than 540 points after the announcement.
Reportedly, it’s not just the US markets who felt the tumble. European stocks also joined the sell-off as Germany’s exporter-led Xetra Dax 30 lost upwards of 2 percent. London’s FTSE 100 is down 1.5 percent as well.
Bitcoin a Safehaven
It appears that investors might have turned to Bitcoin as a hedge against the tumbling traditional markets.
The world’s largest cryptocurrency gained upwards of $700 which represents a 6% increase in the past 24 hours alone. Currently trading at above $10,500, Bitcoin sits on a market cap of almost $188 billion.
It’s not the first time this happens, though. Back in May, when Trump announced that he intends to tariff Chinese goods, traditional markets felt it in pretty much the same sense as they did now.
According to a popular Bitcoin analyst, as well as a blockchain investor, Oliver Isaacs, the trade tension between the US and China could be one of the factors that propel Bitcoin further as investors see it as a hedge on their investments.
The net effect of the trade war between the US and China has led to the sudden interest in bitcoin as a hedge on investments.
On another note, Gold is also up 1.10% today as it’s commonly seen as one of the most preferred go-to safe-haven investments in times of economic instability.
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