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The economic confrontation between the United States and China takes over a new dimension. This trade war is far from limited to traditional stock exchanges, now affecting the cryptus market. Between Donald Trump’s announcement with regard to the creation of the National Strategic Reserve Kryptos and the Chinese response to American Economic Sanctions, investors participate in market movements of rare intensity. The question now arises: is this instability fleeting or should we expect a lasting impact?
Kryptos under voltage after Trump’s announcement
Donald Trump surprised the financial world by revealing its project National Reserve Cryptos. Bitcoins, Ethereum, XRP, Solana and Cardano were placed in the core of this new strategy that meant an unprecedented turnaround in American economic policy. Thus, the aim is to strengthen the digital sovereignty of the United States in the context of increased rivalry with China and predict the development of financial stock exchanges.
The announcement immediately made the markets jump. That’s why Bitcoin reached $ 95,000 before stabilizing around $ 89,870. Cardano and XRP also have also seen a significant increase, in generalized dynamics up. But the euphoria was short -term. The American commercial offensive against China quickly caused a reaction that suddenly reversed the trend and dropped Kryptos in a few hours.
A trade war that threatens the financial balance
On March 4, Washington decided to emphasize economic pressure by reporting his duties on several fronts. Canadian and Mexican imports are now taxed up to 25 %, while Chinese products are increasing taxes, from 10 to 20 %. The aim of this measure is to officially fight against fentanyl operation, but Beijing considers it an enemy maneuver and immediately responded.
In response, China has introduced 15 % tax on several American agricultural products, including wheat, corn, cotton and chicken. In addition, the Chinese government confiscated the world trade organization. It condemns the attack on international trade rules. This clearing caused a shock wave on the financial markets, which led to a brutal decline in stock market indices. The S&P 500 lost 3 %while Nasdaq dropped by 2.64 %.
These cryptos followed this trend down with a significant correction. Bitcoin dropped by 8.25 %, Ethereum dropped by 10.62 %, Cardano lost 15.9 %and Solana recorded a decrease of 14.6 %. This episode illustrates how the vulnerable Kryptos market remains vulnerable to geopolitical tension and macroeconomic decision.
Why are cryptos affected by this crisis?
Bitcoin, which has long been perceived as an asset independent of traditional markets, is now strongly influenced by the dynamics of institutional investors. This entry into the scene of the Grand Investment Funds has made the sector more sensitive to global economic fluctuations. When the crisis breaks out, these actors will reduce their exposure to risky assets, leading to a massive sale of crypts.
However, monetary instability associated with trade war also encourages investors to turn to traditional refuge values such as gold, at the expense of bitcoins and altcoins. In addition, Trump’s initiative raises questions about the future of the market crypto regulation. The growing institutionalization of Kryptos could strengthen the control of the US authorities, at the expense of independent actors and private investors.
If this crisis generates immediate repair, some analysts believe that it could eventually create opportunities to buy. Arthur Hayes, a former CEO of Bitmex, believes that this decline could be a strategic lever for Donald Trump to force a federal reserve to accept a more flexible monetary policy. According to him, a decline in bitcoins around $ 70,000 would not be a threat, but an accumulation opportunity before the new bull cycle. In the coming months, the Kryptos market will be decisive. Such uncertainty about US economic policy and Chinese reaction will continue to influence trends. It remains to be found whether Kryptos will regain his refuge status in the face of these turbulence or whether they will remain trapped in geopolitical and economic tension.
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A graduate of the Toulouse and the Blockchain Consultant Certification certification holder and I joined the adventure of Cointribuna in 2019. I convinced of the potential of blockchain to transform many economy sectors, committing to raising awareness and informing the general public about how the ecosysty developed. My goal is to allow everyone to better understand blockchain and take the opportunity they offer. I try to provide an objective analysis of messages every day, decrypt trends on the market, hand over the latest technological innovations and introduce the economic and social issues of this revolution.
Renunciation
The words and opinions expressed in this article are involved only by their author and should not be considered investment counseling. Do your own research before any investment decision.