Why US-China Trade War Might Be Good For Bitcoin
I know this might sound awkward and absurd to some people, but I do believe a trade war between the US and China (assuming they keep escalating) would actually be good for Bitcoin and the rest of the crypto market. You might be wondering “how” or “why” so let me explain.
First of all, we live in a post-pandemic era where trust between countries has become very different compared to a year or two years ago. We don’t live in the same situation as it was. Many countries have lost their trust in China and the public sentiment around them has also changed. Interestingly, many countries also don’t trust the U.S. leadership under Donald Trump and things might not become very different under Joe Biden either.
The point is, that the U.S. and China are heading into inevitable competition on the top of the global economy and they will do whatever they can to beat each other. And for the crypto industry, this might be good, as the crypto industry has no centralized head. We don’t even know where the real Satoshi Nakamoto while it’s very easy to answer the question “who’s the head of this central bank” or “who is the leader of this country”. Decentralization services are the key to reaping the benefits of the trade war.
You Can Always Bend Politicians
Here’s the thing about politics. They are highly flexible depending on the politicians’ interests. Just look at how the U.S. government trying to ban TikTok and WeChat just because they come from China. Imagine this kind of scenario 5 years ago, you wouldn’t think it would be possible. But now the U.S. has adopted a “tit for tat” approach because we all know the Chinese government also doesn’t allow western social media to take over the local market there.
And due to the ever-escalating trade war, I can see that both countries will also try to gain massive worldwide sympathy as much as they can get. Take a look at Indonesia’s defense minister, Prabowo, who was banned by the U.S. government for 2 decades due to human rights issues. But now the U.S. suddenly changed its own rule and issued a visa to Prabowo simply because the U.S. wants to get the Indonesian government’s sympathy against China.
And this kind of thing will become much more common in the future. Both countries will support each other opposition. The U.S. will support Taiwan, the protesters in Hong Kong, and many others that can strategically put some type of social and political pressure on the Chinese government. On the other hand, the Chinese government might also support anything that can put some kind of international pressure on U.S. politics.
The Crypto Industry Might Benefit
As for the crypto industry, it can surely benefit from this trade war. You can imagine that the U.S. is probably thinking of relaxing crypto regulations due to the Chinese government issuing its own digital yuan with its own private blockchain system. There are people already saying that established stablecoins like PAX and USDC might become the face of the digital dollar to compete against the Chinese government. There are also people who have been saying that big crypto projects will be exempted from very tight SEC rules due to how they want to attract blockchain startups into the country.
You see, none of these talks were even possible 1-2 years ago, but escalating trade wars have changed some opinions. In fact, I firmly believe that it’s time to be optimistic if the trade war between China and the U.S. keeps escalating (and for some reason, I think it’s inevitable for them to go even further against each other).
If the Chinese government takes a very hard approach against Bitcoin and other public cryptocurrencies, perhaps it’s time for the EU and the U.S. to try to welcome blockchain technology.