In a Nutshell
- Bitcoin remained largely unaffected by the recent U.S.-China trade tension flare-up, despite nearly $1 billion in crypto liquidations and $430 million in ETF outflows.
- Trump's claims of China violating a trade truce led to a 50% increase in tariffs on steel and aluminum imports, sparking threats of retaliation from Beijing and market volatility.
- Analysts at QCP Capital believe that the selloff is short-term repositioning rather than an indication of panic, with Bitcoin likely to trade between $100K-$110K in the near future.
The Art, Fashion, and Entertainment Hub - Decrypt
Trade Tensions Spark Market Turmoil
Bitcoin's value remains dampened amidst escalating criticism due to President Trump's alleged comments, potentially causing market turbulence.
Amid renewed U.S.-China trade tension, Bitcoin kept its footing above $104,000 on Monday. Last Friday, President Trump bemoaned China's alleged breach of a trade truce and announced a tariff hike on steel and aluminum to 50%. This move was met with threats of "forceful measures" from Beijing, causing market turmoil.
Trump's campaign rally at a U.S. Steel plant in West Mifflin, Pennsylvania, was filled with tough talk on tariffs and promises of securing the steel industry in the United States. The price increase will allegedly boost American workers in the steel sector.
Crunching the Numbers
The escalating trade drama led to nearly $1 billion in crypto liquidations, according to QCP Capital's Monday analysis. BlackRock's iShares Bitcoin Trust ETF, which had a record 34-day inflow streak, saw $430 million in outflows on May 30. Despite these withdrawals, Bitcoin continued to hold steady.
Currently, Bitcoin is trading at $104,158, marking a minor 0.1% increase over the last 24 hours. The QCP noted that risk reversals have begun to normalize, and perp funding has turned flat, suggesting controlled future price movements.
Institutional Investment Remains Strong
Undeterred by the market turbulence, institutional interest in Bitcoin remains strong. Japanese firm Metaplanet added an additional $114 million in Bitcoin after the selloff, bringing their holdings to 8,888 Bitcoin, worth over $925 million.
Analyst Arthur Azizov from B2 Ventures sees the tariff headlines as contributing to market churn but doesn't expect them to have a lasting impact on Bitcoin or other digital currencies. He suggests that long-term investors should remain unfazed by these short-term developments.
China's Response
In response to Trump's claims, China's Ministry of Commerce has issued a statement, branding them "groundless." The statement warns of "forceful measures" and accuses the U.S. of imposing discriminatory actions, including AI chip bans, visa revocations, and software restrictions.
The Chinese Embassy in Washington shared details of the statement from the Ministry of Commerce on its official website. It's important to note that due to the 25% tariff imposed in 2018, China exports little steel to the U.S., ranking third in aluminum supply, which makes the new 50% tariff a significant blow to the nation.
Tariffs and Cryptocurrency Markets
Historically, increased global economic uncertainty due to escalating trade policies or tariffs can cause heightened volatility in the cryptocurrency market. In these times, investors tend to seek alternative assets like Bitcoin and stablecoins. [Enrichment: Institutional Interest]
The easing of U.S.-China trade tensions boosted the cryptocurrency market, particularly Bitcoin, with potential for further growth as global conditions continue to evolve. [Enrichment: Potential for continued growth]
- Amid the renewed U.S.-China trade tension, Bitcoin kept its footing even above $104,000, showcasing stability in the crypto market amid market turmoil.
- Despite the nearly $1 billion in crypto liquidations and $430 million in outflows from BlackRock's iShares Bitcoin Trust ETF, Bitcoin continued to hold steady, indicating strong institutional interest.
- QCP Capital's analysis attributed the selloff as short-term repositioning rather than an indication of panic, suggesting that Bitcoin may trade between $100K-$110K in the near future.
- In the art, fashion, and entertainment hub's analysis of the trade drama, analyst Arthur Azizov from B2 Ventures sees the tariff headlines as contributing to market churn, but doesn't expect them to have a lasting impact on Bitcoin or other digital currencies.
- The Chinese Ministry of Commerce has issued a statement branding Trump's claims as "groundless," and threatens forceful measures in response. History shows that increased global economic uncertainty due to escalating trade policies or tariffs can lead to heightened volatility in the cryptocurrency market, making Bitcoin and stablecoins attractive alternatives for investors.
