Summary
- Bitcoin has dropped back to $76,500 as the stock market retracts after initial gains caused by excitement over the cryptocurrency.
- The White House confirmed that 104% tariffs on goods from China will begin at midnight.
- The Chinese yuan has depreciated to 7.4 against the U.S. dollar, raising concern yet also offering potential opportunities for cryptocurrency investors.
Market Overview
The recent rally in the crypto market encountered a quick shutdown as stocks took a downturn. Bitcoin, after nearly reaching $80,000, fell back down to $76,500, with a stabilization below $78,000. In the last 24 hours, bitcoin has seen about a 1.2% decrease, while ether (ETH) fell almost 4%, dropping under $1,500. The CoinDesk 20, an index tracking the leading cryptocurrencies, registered a 2.2% decline.
Additionally, cryptocurrency stocks have also been adversely affected. Noteworthy losses were seen in firms such as Bitdeer (BTDR) at down 8.7%, MicroStrategy (MSTR) dipping by 5.3%, and Coinbase (COIN) losing 2.3%. Contrarily, DeFi Technologies (DEFTF) showed some resilience with a 10.27% gain, possibly due to expectations of a Nasdaq listing, similar to Galaxy Digital (GLXY).
Tariffs Impact
The White House’s announcement of heavy tariffs on Chinese imports is expected to bring more volatility to the crypto and stock markets. Furthermore, these tariffs are anticipated to weaken the Chinese yuan substantially, which some analysts believe could lead to a surge in capital outflow into Bitcoin from China.
Quote
“If not the Fed then the PBOC will give us the yahtzee ingredients,” wrote Arthur Hayes. Translation: “If not the Federal Reserve then the People’s Bank of China will provide the crucial elements for success.”
Kretov from CoinPanel remarked on the current environment of market uncertainty and the potential repercussions of persisting international tensions. Investors are encouraged to keep a close eye on developments that could influence the capital flows towards cryptocurrencies.
