Bitcoin has been on a roll, hitting a new high of over $126,000 early last week. But on Friday, markets were shocked by President Trump’s latest trade war move – the threat of “massive” new tariffs against China.
After President Trump’s social media post, the results were nothing short of catastrophic, resulting in the largest single-day liquidation in history, with over $19 billion of mostly leveraged positions in crypto futures liquidated.
bitcoin price There was a sudden decline, albeit temporarily. under 110,000 dollars. It has since partially recovered and is currently trading at $113,494, according to CoinGecko. On the other hand, gold broke a new record $4,099 per ounce on Monday.
This begs the question: do so-called derogatory transactions using Bitcoin and cryptocurrencies still exist?
Concerns about excessive government debt and money printing are making alternative assets more attractive to investors. Among investors, digital assets were one of the trading options this month hoarding Gold, Bitcoin, and stocks are examples of ways to protect against currency depreciation.
Experts said that despite Friday’s flash crash, there has been only a slight recovery since then. decryption That means there is still room for Bitcoin and other digital coins to be executed as part of transactions.
“I think the (downgrade) transaction will take another 10 years,” said Greg Magaddini, director of derivatives at Amberdata. “Global inflation is occurring, making holding the US dollar and long-term government bonds more risky,” he added, arguing that these conditions will benefit Bitcoin in the future.
Bitcoin has benefited from the Fed’s expansionary monetary policy in the past. As interest rates fell to zero during the coronavirus pandemic, the prices of major cryptocurrencies soared to new highs.
The US central bank aggressively raised interest rates and is now lowering them again. Dilin Wu, research strategist at Pepperstone, said: decryption As long as interest rates do not remain high, discount trading will continue.
“In my view, the only factors likely to end this cycle are sustained increases in real interest rates and a return to fiscal discipline,” he said.
He added: “A significant and sustained rise in real interest rates, an extended period of dollar appreciation, or clear institutional capital outflows, such as large ETF withdrawals, would lead to a reassessment of Bitcoin’s role as a hedge against land price declines.” “Without these conditions, Bitcoin’s upward momentum remains largely intact.”
So what about other coins and tokens? After Friday’s crash, Bitcoin is still 10% below its all-time high, but other coins and tokens have suffered even more. Solana and XRPthe coins in fifth and sixth place, respectively, have partially recovered from last week’s price plunge, but both remain more than 30% below their new highs reached earlier this year.
There’s no need to fear, said Zach Pandle, head of research at Grayscale. decryption—If the downward price trade continues, the prices of major altcoins should continue to rise.
“While it may take a few days for the crypto market to recover from the outflow of leveraged trader positioning, we continue to believe that the decline is temporary and that many tokens are on the path to new highs,” he said.
