Beijing said late Friday that it would increase taxes on $70 billion worth of US imports of between 5 and 10 percent. That progressed its already worsening trade dispute with Washington which last week had announced a similar tariff on $300 billion of Chinese imports.
Bitcoin spikes after China announced additional tariffs on US goods | Image credits: TradingView.com
The BTC/USD instrument spiked by $355, or 3.52 percent, to establish a local high towards $10,449.52 on San Francisco-based Coinbase exchange. The move uphill appeared shortly after China’s announcement, validating bitcoin’s growing correlation with the global trade dispute. Investors/speculators evidently went bullish on the cryptocurrency’s near-term price prospects, a move similar to many ever since the US-China trade war picked momentum.
Sentiments towards the Chinese Renminbi dwindled on Friday, with analyst predicting the national currency would fall further due to the tariff announcement. As of 10:00 UTC, one dollar bought 7.079 yuan, the unit of the renminbi. Earlier, the price had dropped towards 7,099, a level never-touched-before since the financial crisis 11 years ago.
Currencies across the globe crashing to all-time, or multi-decade lows, and no one talking about. Gee, I wonder if #Bitcoin will succeed. See the Yuan, Rupee, Peso (Mexican and Argentine), Euro, Rand, Brazilian Real, etc.
— Andy Hoffman (CryptoGoldCentral.com) (@Andy_Hoffman_CG) August 22, 2019
The People’s Bank of China allowed the renminbi to go down below 7 a dollar in early August, sparking a further escalation in their dispute with the US. The move prompted the White House to call China a “currency manipulator.”
Meanwhile, bitcoin encashed the most as two superpowers remained engaged in a tit-for-tat strategy. The cryptocurrency surged 5 percent on the day PBoC forced the renminbi lower. It is now eyeing to repeat the price action as investors look for safe-haven assets against the impending economic meltdown.