Mike Smith
9 days ago
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The escalating economic conflict between the world's two largest powers is having a powerful impact on the global financial system. New restrictive measures announced on April 8 have become another round in the growing confrontation. The U.S. side announced an increase in duties on Chinese goods to 104%, which caused an immediate reaction. The Chinese authorities responded by promising to raise import tariffs on US products to 84%, with an effective date of April 10. Amid the growing tension, investors began to rapidly reallocate assets, and the consequences were not long in coming.
The market of futures on U.S. securities reacted instantly - within a few days the S&P 500 index lost about $5.8 trillion in market value. Similar tendencies are observed in Asia: stock exchanges of the region demonstrate a decrease in activity. The sector of digital assets was not spared from the blow. The total market value of all cryptocurrencies fell to $2.45 billion, with Bitcoin once again under pressure. Attempts to overcome the psychologically important level of $ 78,391 were unsuccessful. Analysts note that the consolidation above this mark is unlikely, especially given the growing volatility.
The dynamics of fear and greed index deserves special attention, which sharply fell to 18 points. Such values were previously recorded only in the summer period of 2022, which indicates a deep uncertainty of investors. Against this background, interest in traditional assets, such as gold, which is historically perceived as a “safe haven” in times of instability, has increased. However, even this option raises doubts among some analysts.
Gold bars require reliable logistics and storage, which in the conditions of slowdown of the world economy turns into a factor of additional costs. Financial risks are increasing, and with them the need for alternatives. From this point of view, digital assets have a number of competitive advantages. Bitcoin does not need physical transportation, does not require secure storage facilities and has limited issuance, which makes it a potential instrument for long-term capital protection.
While market participants are searching for safe solutions, cryptocurrency continues to be the subject of fierce debate. Some see it as a symbol of future financial independence, while others point to its excessive exposure to geopolitical shocks. But even against the backdrop of pressure from macroeconomic factors, the very idea of decentralization and supply constraints embedded in Bitcoin remains a strong argument in favor of its prospects.
