Big tech firms including Apple, Amazon, Facebook, Microsoft, and Google’s parent company Alphabet Inc. lost over 3% of their market cap on Monday, resulting in a combined loss of more than $162 billion in stock prices.
Financial Markets Lose Billions As Bitcoin Surges
Major financial markets experienced their worst performance yesterday, as trade tensions continue to rise between the U.S. and China, CNBC reported. Shortly after U.S. President Donald Trump announced additional tariffs on $300 billion worth of Chinese imports on Friday, big tech’s five lost a total of $66 billion in market value.
The U.S. Federal Reserve also recently slashed interest rates for the first time in Bitcoin’s relatively short 10-year history and also the first since the global financial crisis of 2008. As the traditional fiat currency markets struggle due to escalating political tensions, the Bitcoin price continues to surge.
The flagship cryptocurrency is currently trading at around $11,800 after briefly surpassing the $12,200 mark earlier today (and then slightly correcting), according to CoinMarketCap. The Bitcoin price is up over 10% for the month, and more than 265% since January 2019.
Bitcoin’s Surge Above $11k is Due to US Tariffs on Chinese Goods
Tom Haxson, head of U.S. operations at CoolBitX, a multinational blockchain security firm focusing on crypto asset compliance, told Trustnodes:
“While markets are in turmoil around the globe, the recent bitcoin surge above $11K has a lot more to do with the 10 percent tariffs on $300 billion worth of Chinese goods announced by President Trump.”
Haxson added that the economic uncertainty has “sent the Yuan into a tailspin, and China has responded with another escalation of the trade war.”
He also pointed out that the Yuan has rebounded to the critical 7 per USD level, however political and economic uncertainty remains high. According to Haxon:
“For a lot of currency holders, bitcoin is seen as a safe haven.”
In a recent appearance on “Squawk Box”, Bitcoin bull Anthony Pompliano revealed that around 50% of his net worth is held in the world’s most dominant cryptocurrency. The widely-followed crypto expert argued that Bitcoin is a sensible investment and hedge against the traditional financial system.
Bitcoin Is A “Non-Sovereign, Highly Secure Digital Store of Value”
He noted that it basically comes down to supply and demand. Unlike inflationary fiat currencies that can be printed indefinitely by central banks, Bitcoin is a deflationary asset as its supply has been capped at 21 million. By design, the pseudonymous cryptocurrency is a scarce asset which was worth nothing a decade ago, but has outperformed all other major assets since it came into existence.
Because its market value is not dependent on the monetary policy of a particular country, analysts believe Bitcoin could be used as a legitimate alternative investment. During an interview with CNBC, Jeremy Allaire, the CEO of crypto payments firm Circle Internet Financial, said that Bitcoin has turned into a safe haven due to rising macroeconomic and geopolitical uncertainty.
“You can very clearly see some macro correlation there. I think the broader theme of … Bitcoin specifically, crypto more broadly participating in these global macro forces is becoming more and more clear. Rising nationalism, rising amounts of currency conflict, trade wars, these all obviously are supportive of a non-sovereign, highly secure digital store of value.”