The global trade war declared by the US has sent shockwaves through the stock market, but it’s having a devastating impact on another market – cryptocurrency. Bitcoin, once touted as a symbol of financial freedom and a potential safe-haven asset, is now plummeting in value.
As of April 6, the price of Bitcoin fell sharply to $78,800, down from its all-time high of over $100,000 in January. The decline has been swift and unexpected, with even last week’s value of nearly $90,000 now a distant memory. This downturn is not isolated to Bitcoin; the entire crypto market is experiencing significant losses.
Despite predictions that a global trade war would strengthen Bitcoin, its value is now taking a hit. One reason for this is that the primary use case for Bitcoin – financial speculation – has led to a surge in selling among casual investors who are seeking safe-haven assets in real currencies. This trend is evident in the increased adoption of Bitcoin ETFs, which suggests that the asset is no longer aligned with its original libertarian-anarchist ideals.
In the current global financial turmoil, Bitcoin’s value is highly dependent on its ability to provide a more stable store of value than traditional currencies like dollars, yen, and euros. However, as the article points out, Bitcoin has significant flaws that make it unsuitable for everyday transactions or use as a reliable store of value. Its volatility, risk of scams and hackers, and limited transaction capabilities are just a few examples of its shortcomings.
The current market trend suggests that Bitcoin’s popularity is largely driven by speculation rather than its inherent value as a currency. As the author notes, “Number Go Up” has become “Number Going Down.” With this in mind, investors and enthusiasts alike should be cautious about investing in Bitcoin and other cryptocurrencies, especially during times of economic uncertainty.
Source: https://www.theverge.com/cryptocurrency/644749/bitcoin-tariff-fall-pricing