Steep declines in Bitcoin and Ethereum prices, awaiting President Trump's decision on future tariffs.
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As the expiration of the tariff truce looms on July 9, analysts and investors are keeping a close eye on the potential impact on the crypto market. The "Crypto Week" in Washington, set to commence on July 14, is expected to be a key factor in determining the short-term trajectory of digital assets.
The 90-day truce on tariffs, established by the Trump administration, is set to expire on July 9. According to White House letters, new tariffs affecting over 100 countries could come into effect on the same day. However, it's important to note that these tariffs primarily target goods and trade sectors, with additional import taxes ranging from 10% to 40%.
Cryptocurrencies, such as Bitcoin and Ethereum, are not directly affected by these tariffs. However, they can be influenced by broader economic conditions that might indirectly arise from trade tensions. For instance, increased tariffs can contribute to inflationary pressures or disrupt global supply chains, potentially driving investors to seek alternative stores of value like Bitcoin or Ethereum as a hedge.
The lack of bilateral agreements between the United States and key partners like Japan, South Korea, and the European Union has caused concern in the markets. This uncertainty can suppress speculative asset prices, including cryptocurrencies.
The crypto market has shown signs of volatility in recent days. Altcoins like Solana, Cardano, XRP, and Dogecoin have registered drops of between 1% and 3%. Some meme coins linked to political figures have lost up to 10% of their value.
Cryptocurrencies could function as a hedge against the devaluation of local currencies and restrictions on cross-border payments in emerging markets affected by tariffs. They could also consolidate as parallel financial infrastructure, especially in countries facing high tariffs or exclusion from the SWIFT system.
The use of DeFi platforms is expected to increase in regions where commercial sanctions make access to traditional banking services difficult. Bitcoin and stablecoins have gained prominence as a store of value and an alternative to physical dollars in countries with limited access to foreign currencies.
As we move forward, investors should pay attention to official announcements, the behavior of Bitcoin ETFs, and the decisions of the Federal Reserve. The week starting July 14 will see the so-called "Crypto Week," during which the Congress is expected to debate three key projects for the market and its disruptive innovation.
In conclusion, while Trump's new tariffs significantly affect international trade flows and sectors like steel, aluminum, and consumer goods, these measures do not directly target cryptocurrencies. Any effect on Bitcoin and Ethereum prices would be indirect, stemming from macroeconomic and market sentiment changes triggered by trade tensions and economic uncertainties related to the tariffs.
[1] Analysts at UBS Global Wealth Management believe that if the US delays tariffs again, markets could interpret this action as reluctance to impose them, which would support risk appetite. [2] Cryptocurrencies could function as a hedge against the devaluation of local currencies and restrictions on cross-border payments in emerging markets affected by tariffs.
- Amidst the upcoming tariff changes, technology-driven investments, such as cryptocurrency, could provide an alternative avenue for finance, potentially serving as a hedge for investors in emerging markets experiencing currency devaluation or restrictions on cross-border payments due to tariffs.
- In the realm of sports, it's interesting to consider the parallels between the volatile and competitive crypto market and the ever-changing landscape of sports finance, where teams and events often rely on sponsorships and investments to thrive, similarly mirroring the role of international trade partnerships.
