For some time now, there has been a trade war between China and the United States of America. These are the world’s largest economies. Over the weekend, the war intensified, and that even weakened the stocks in Asia as well as the stock futures. In the latest salvo in this trade war, Steven Mnuchin, who is the Treasury Secretary had to double down. But what has come to be realized is that this war is helping Bitcoin so much. In the midst of the trade war, eToro has been able to register spikes of BTC trading volumes. The virtual coin has also managed to form a very strong correlation with gold.
Strong Inflow Of Capital
As a result of the ongoing trading conflict, a strong inflow of capital has been created into the leading crypto coin in terms of market cap, Bitcoin. This is based on statistical data that was offered by analysts from eToro, a leading online broker. Between 19th May and 19th August 2019, eToro was able to record a 284% growth in the sales of Bitcoin. This is much higher compared to the similar period in 2018. Over the same timeframe, a tradition safe-haven asset, gold, managed to rise by 73%.
The Turning Point In The Trade Conflict
According to the experts from eToro, the trading volume for crypto dramatically grew after a particular turning point in the trade conflict. On May 13th, for instance, the number of new Bitcoin’s positions on the main eToro trading platform rose by 139%. This came just some few hours after China reacted on the decision of the United States to hike tariffs. A momentum of the same was also noticed on the 13th of August and on the 25th of June 2019. They were both noticed at a time of serious tensions. According to eToro’s analysts, Simon Peters, BTC, shares the same features to gold in the fact that they will always be a finite amount in circulation. On top of that, Peters explained that these assets are also decentralized, and their prices can never be affected by inflation. However, Bitcoin has an added advantage over gold when it comes to the lower costs of storage.
Bitcoin Is Still The Crypto To Watch Despite The Conflict
Scarcity is one of the features of gold that BTC possesses. But besides that, the intrinsic deflationary nature of this coin makes it so resistant to decisions of interest rates that are charged by central banks. As a result of all that, both the digital asset and the precious metal are referred to as a safe haven for those who want to invest during political and economic turmoil. BTC is also vulnerable to hacks, just as it is also to allegations of manipulation of price. The connection of BTC with gold may, however, show that the virtual coin is shifting slowly towards the value asset’s lower-risk store. At the moment, the pair of Bitcoin and the US Dollar is trading at $10,350.