Worried about a trade war? Buy some bitcoin!
At least that is the advice given by one Crypto Analyst.
Yes "Crypto Analyst" is kind of a new term in financial markets, but there are a few self described ones out there.
Which brings me to Brian Kelly of CNBC's Fast Money, Crypto Analyst and Hedge Fund Manager.
He stated on CNBC Friday evening that investors should look to bitcoin to hedge against a possible trade war.
Cool, but why are we even talking about trade wars?
If you haven't heard, President Donald Trump announced a 25% tariff on steel imports and 10% tariff aluminum imports that would go into effect next week.
Though his thoughts seemed to be in the right place, the results thus far haven't been pretty.
The stock market has sold off over a 1000 points and Economists and Countries alike have weighed in with their displeasure over the announcement.
Basically saying that at the very least, it will do more harm than good, if not destroy more jobs than it creates and plunge the US into a recession.
Why bitcoin makes sense?
In the past, in times of trade wars, hard assets have done much better than currencies according to Kelly.
Specifically he had this to say:
"In this environment, I want to own those things that are deflationary and fixed supply in an inflationary environment. And look at what bitcoin has done the last couple of days."
Bitcoin is up about 7% on the week:
(Source: https://www.coinbase.com/dashboard)
Not bad considering stocks are off about 4% and gold is down about 1%.
Which brings me to his next point.
According to Kelly, and many others, bitcoin is the new gold, digital gold.
Traditionally, gold has done well in times of turmoil. Kelly fully expects bitcoin to behave the same way.
Specifically he had this to say regarding bitcoin replacing gold as a store of value:
"But you know what, now we have bitcoin. Bitcoin has a fixed supply. It acts exactly like a hard asset, exactly like a commodity."
"In the trade war, it does well."
He makes a good point and I can't say I disagree.
As I type Bitcoin is continuing to march upwards now getting near $11,500.
Stay informed my friends.
Image source:
http://fortune.com/2018/03/01/bitcoin-price-sec-ico-crackdown/
Follow me: @jrcornel
I am holding to Ethereum as well
I believe both bitcoin and Ethereum will reach new heights in 2018.
BTW Are you on Discord as well @jrcornel?
its rallied well but it will sell off bitcoin wait and see
my thoughts as well
Hmm interesting - I can't help but agree as well with the overall analysis. I think the one wrinkle is whether Tether was actually artificially propped up. I think for BTC an alternative store of value it still needs a baseline value grounded in USD for the moment, but either way, I should probably rebalance a bit into BTC from Gold/ETH...
If there is a trade war, crypto would be a good choice.. now in crypto you can invest in DigixDAO ( DGD )...this coin is backed up by actual gold...they even mail you the gold you purchase if you demanded
Trade wars are bad for everyone but there's a Bitcoin lining to this one. As I write this Bitcoin is hitting 11,500 USD!
Gotta love them linings..!
This new piece of news is exactly what bitcoin needs to get back to its former glory! The FOMO is going to be strong!
Trump has been so good to bitcoiners! It was after the uncertainty of his election that bitcoin started mooning!
I love a good stand alone complex when it materializes and the cryptoworld is full of em!
We don't know what is causing this small uptrend in bitcoin above $11,500, but we'll take it! Yes, this steel tariff trade war may very well cause higher bitcoin demand as a safe haven in conjunction with the stock market falling. Investors have such a high hurdle rate in this market they will be forced to leave the stock market for crypto! :)
Any sort of distress in financial system will push people towards deflationary asset class. While we have a corrupt and erroneous monetary system in place its inevitable to see gains in Bitcoins . Because its more Dollar Implode than Bitcoins rise .
This does go some way to explain things. Interesting to see what the impact will be when tariffs go into effect next week. Surely this will push up costs for US manufacturers as it takes a while to start up steel producers!
The stock market dropped sharply in response to the tariffs, but Trump has been signaling his intentions for years. This should not have come as a surprise to anyone. Trump is focused on creating jobs so expect more tariffs to come down the pike. Trump is trying to do what Reagan did when he was in office, which was to impose tariffs on Japanese auto manufacturers to force them to build manufacturing plants in the U.S. It worked and can work again. I expect the Chinese to retaliate so there may be some turbulence ahead, but the U.S. is in a good position.