The encryption and stock merchants had hope for the last minute solution to prevent the United States from enacting a 104%tariff on Chinese products entering the United States. The mayor confirmed that the market would deteriorate when Donald Trump’s trade advisor Peter Navarro said it was “not negotiation.”
As a result, the S & P 500 index ended with a loss of 1.6%on April 8, reversing the transfer profit of 4%. The stagnation wondered if traders could restore optimistic momentum as Bitcoin (BTC) worsened macroeconomic conditions.
There is a problem with US debt and open a way for Bitcoin profit
The S & P 500 index decreased by 14.7%between April 2 and April 7, causing panic among Bitcoin holders and forced to reinvest $ 75,000, the lowest for more than five months.
S & P 500 Future (left) vs. bitcoin/USD (right). Source: TradingView / COINTELEGRAPH
President Trump said on April 7 that his goal was to “reset the table” for trade in the appearance of Prime Minister Benjamin Netanyahu. “There may be permanent tariffs, and there may be negotiations because there are things you need beyond tariffs,” he added. According to Yahoo Finance, the merger with IPO was delayed among these uncertainty, and loan transactions and bond sales were side.
It is clear that if the trade war subsides, the stock market may be rally. According to Reuters, economists warned that tariffs can cause inflation and significantly increase the possibility of economic recession. But evaluating the impact on the price of Bitcoin is still difficult. Some investors regard Cryptocurrency’s fixed currency system as a protection of continuous expansion of global Fiat currency products.
Short -term correlation harms the BTC, but interest rate cuts can turn the assistant.
In the short term, the positive correlation between Bitcoin and the stock market is expected to continue. Nevertheless, the US government’s fiscal issues offer potential opportunities for Bitcoin’s prices. On April 8, the US 10 -year financial yield rose to 3.90%on April 7, up to 3.90%, to 4.28%, which suggests that investors are demanding higher profits to hold these assets.
US dollar index (DXY, left) vs. US 10 -year financial yield (right). Source: TradingView / COINTELEGRAPH
In order to mature in the next 12 months, the cost of federal debt exceeding $ 9 trillion is expected to increase fiscal imbalances and weaken the US dollar. The US dollar index (DXY) fell from 104.2 on March 31 to 103.0 on April 8, diverging in the US financial yield, which can support the emotions shared with investors by BLACKROCK CEO Larry Fink on March 31.
relevant: Weak Yuan
Michael Gapen, the top American economist at Morgan Stanley, mentioned on April 8 as follows. It is expected to maintain the interest rate at 4.25% -4.50% by month, and added that “the recession will change the aesthetic” and “the recession can mean the previous and larger upward cuts.”
Merchants are likely to be positive for Bitcoin’s momentum, as the US Federal Reserve Bank recognizes that tools to avoid the recession without risk of inflation. It is uncertain to predict the exact time of the failure, but long -term delays in solving the trade war problem can lead to investors in fear of lack of assets such as Bitcoin, especially the US dollar evaluation.
This article is for general information purposes and should not be considered legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.