“The announcement of the duties by the Trump Administration has shocked the markets from all over the world. Although in the early hours the reaction had been prudent, on Thursday Wall Street lost 2 thousand billion dollars of capitalization. The Bitcoin it first went up to an altitude of 88,300 dollars and then fall back to $ 85,200 When the details on the individual rates were known, including a minimum tax of 10% extended to all imports and a 34% rate on the goods produced in China. Also The dollar index has droppedgoing from 104 to 102, in line with the expectations of a more accommodating monetary policy. This can be good news for Bitcoin: Historically between the two assets there is an inverse correlation“. This is what it claims Alexander SchmidtIndex Fund Manager of CoinShares.
Unknown duties
“Although Trump in his speech has not been the result from his previous statements, reiterating the idea that the duties are a tool to protect and stimulate the American economy, however, did not dissipate the unknowns about implementation and the timing of rates and possible retaliation by partners Commercial of the USA – Schmidt pointed out -. The uncertainty remained, therefore, high, contributing, together with the signals of economic slowdown, to the current de-Risking dynamic “.
Uncertainty and volatility
“During the month, We expect a volatility phase in the marketsincluding that of Bitcoin, due to the uncertainty generated by the unpredictability of the results of the negotiations and the possible retaliation by the countries affected by the duties. The publication of the employment report in the USA and the presentation of the reports of federal agencies on their competences on the transfer of assets in the Strategic Bitcoin Reserve (The cryptovlute reserve announced by Trump, editor’s note) could increase volatility already during this week, “explained the analyst.” In particular, the latter event could represent a potential stimulus, if it translated into an effective transfer (On-Chain) of Bitcoin on Wallet of the US Treasury and/or in signs of the start of the early stages of establishment of the government reserve of the cryptocurrency “, he added.
Central banks at the crossroads
“In any case, the protectionist policy of the USA administration, with differentiated duties for the different countries and with variable rates, makes a lot complicated to predict evolution of the scenario. Of course, if the duties are applied according to the forecasts, the risk of a recession it will increase in a significant way. Since the affected countries could launch stimulus measures, generating inflationary pressures, It is not clear what the orientation of the central banks will be: if expansive to counteract the contraction of the economy or restrictive to keep prices under control, “concluded the Index Fund Manager of CoinShares.
