On Friday, the Chinese Finance Ministry confirmed that it will impose a 34 % tariff on all American imports, as of April 10.
The decision is a direct response to Trump’s previous move to impose a 34 % similar tariff on Chinese goods, which was part of a wider batch of mutual trade agreements.
In its official statement, the Chinese government urged Washington to abandon its “unilateral measures” and engage in a respectable dialogue to resolve the conflict.
The advertisement sent shock waves through global markets.
Analysts warn that the effects of ripple may reach the encryption market, despite their decentralized nature.
Bitcoin (BTC), which rose briefly to $ 84,000, decreased sharply to less than 82,000 dollars after the news, reflecting the wider market concern.
The encryption market was already under pressure after the Trump tariff was announced earlier this week, and China’s step was only a landmark.
Surprises of the encryption market for volatility
Despite the initial decrease, some analysts believe that the cryptocurrency market may not suffer from the same depth of losses as traditional financial markets.
According to the Crypto Kevet Capital strategyDigital assets such as Bitcoin and Ethereum are not only indirectly by tariffs, unlike the traditional sectors represented by indicators such as S&P 500.
Capital noted that Crypto’s current investor morale is supported by monetary policy expectations.
With the markets now in five potential cuts for interest rates from the American Federal Reserve this year, there is hope that support for total economic shocks such as commercial tensions.
However, he also warned that optimism could fade quickly if the Federal Reserve Speaker Jerome Powell rejects the idea of aggressive price discounts.
“If the Powell is closed when dilution, Crypto may eventually reflect the sharp drops in the stock market,” I noticed Capital.
“But if it supports mitigation, the eyes will turn into the consumer price index data due next week.”
Global market ball with a decrease S&P 500
Traditional financial markets have already achieved great success. S&P 500 lost more than $ 1.5 trillion of market value with the opening of trading after the announcement of China.
The futures contracts with Dow Jones Industrial Malce and Nasdaq have also been severe, reflecting fears that the global economy may move towards stagnation.
Meanwhile, European Commission President Ursula von der Lin indicated that the European Union is ready to take counter measures if trade talks with the United States collapsed.
This also adds to the uncertainty attached to the global economy and can increase fluctuations in both stock and encryption markets in the coming days.
Interestingly, Bitcoin has later turned away in the backdrop of the stronger American job data, and to provide support to the theory that encryption markets are currently more sensitive to monetary policy signals than geopolitical tensions.
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