The US is currently embroiled in a nasty trade war with China, and its ripple effects are affecting the crypto industry. This is especially because the war has now caught on within the US bond market.
As is already evident, the happenings in the bond market influence the crypto market.
Cryptos And US Treasuries Are Rising
Since the trade war started, US treasuries have been rising in value, and that has also pushed up crypto prices. Bitcoin, being the crypto market leader, has been the main force behind the crypto price spikes because it’s directly influenced by the bond market.
Chinese Bond Sell-off Could Be Bullish For Bitcoin
According to Professor Panos Mourdoukoutas of Long Island University, New York, China might resort to selling off the bonds it holds in US treasuries, a move that could see some cryptos gain a bullish momentum, However, Professor Panos that such sell off is rather unlikely, but not entirely ruled out.
At the moment, China holds over $1 trillion in US treasury bonds. If a sell-off happens, other competing treasuries like German and Japanese government bonds, as well as Bitcoin, could go up in value.
In turn, Bitcoin would drag the rest of the crypto market into its bull run.
Bitcoin Is The New Gold
Going on, Panos opined that the trade war is now shifting people’s focus from Gold to Bitcoin as the best available store of value, regardless of the fact that Gold prices have remained relatively stable this year.
However, Bitcoin is more appealing in terms of ease of transfer, durability, and scarcity.
Mining Costs In The US Increasing
Besides affect crypto price mechanisms, the trade war could make crypto mining very costly for those in the US because they have to import all mining equipment from China.
According one Dovey Wan, a twitter user, mining in the US is already 25% more expensive than in other places like China.
