What effect does crisis have on the price of Bitcoin?
Taiwan and China are currently in a confrontation over Taiwan’s sovereignty, which affects the Bitcoin price. The situation has come to a head after the Speaker of the US House of Representatives, Nancy Pelosi, visited the Asian country.
As Pelosi’s plane landed successfully, aircraft and naval vessels moved into the region. As tensions escalated, the prices of Bitcoin and other cryptocurrencies reflected the drama in their prices.
Bitcoin and altcoin markets are considered in the category of risky assets. As such, they were negatively affected by the tension between China and Taiwan.
The ongoing tension between Taiwan and China reached a fever pitch on Wednesday, and the US and Chinese naval vessels were mobilized. The Japanese Air Force was also involved in the process. This tension caused the Bitcoin price to drop to $22,600 during the day.
Bitcoin and altcoin markets, which were falling until the Pelosi plane landed, then managed to rise above $23,000.
Taiwan: How cryptocurrency markets will be affected
Although the leading cryptocurrency Bitcoin is described as digital gold, any increase in regional tensions and threats of war has negatively affected the price of BTC.
All the while, the price of gold has increased, while Bitcoin and altcoins have suffered losses. Experts say that if tensions between Taiwan and China escalate, the trend towards gold, the traditional safe-haven asset, will increase. If risk perception increases, exits from the cryptocurrency markets may also occur.
Considering the historical data, it is safe to predict that the BTC and altcoin markets will experience a decline in the event of a war between China and Taiwan.
After Russia started its invasion of Ukraine, Bitcoin almost crashed. Gold prices, on the other hand, picked up speed.
The escalation of tensions between China and Taiwan is not limited to Taiwan’s immediate region. Other countries will be drawn into the conflict, including the US, Japan and the EU.
This puts the macroeconomic outlook on shaky ground and leads to a decline in risk appetite.
Crypto investors would do well to follow the news streams closely throughout the process. Traders can follow the latest developments on our Telegram channel.
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