Why did the Sino-US trade war have a stock market crash and bitcoin strengthened?

In the past two days, the trade war has been escalating. The US President Trump’s behavior is very confusing. From the unwarranted attack on China’s trade surplus, he has been talking about China’s trade in recent days. From attacking the country's normal trade behavior to attacks, including Huawei, Dajiang and other companies, the so-called "illegal behavior" feels that Trump is like a comedian, constantly watching his own performances.

And just after deciding to engage in a trade war with China, we also responded with righteous words. Greatly improved the morale of ordinary people in the country. Huawei and Dajiang also responded positively and rebuked the irresponsible US trade war.

In fact, the people who were ultimately hurt in the trade war are still ordinary people and related enterprises in China and the United States. When US President Trump announced that he would fight a big trade war with China, the domestic stock market is like a stock market crash, and all stock exchange markets. The index fell wildly. When China decided to carry out a counterattack involving 60 billion US dollars of commodity justice, the three major indexes of the US stock market plummeted, and the global stock market evaporated one trillion US dollars a day. The technology giants such as "Apple" suffered heavy losses.

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At the time of the world’s boss and the second child’s joy, people were surprised to find that all real-world stock prices were affected, but the digital cryptocurrency market did not fall back. At the beginning of trade friction in early May, from 5300 The dollar began to climb up to about $8,300 and soared $3,000. Many small partners will also ask us what is the relationship between the stock market and the digital currency world? Why do stocks fall and bitcoin rises?

When Bitcoin was born, it was designed to be a financial act. It was described in a bitcoin white paper written by Nakamoto. "A peer-to-peer electronic cash system." The use at the beginning of the birth is a means of payment, and unlike traditional payment, Bitcoin's payment method does not need to go through traditional intermediary institutions, such as banks, enterprises, and so on. Two people do not need to know at all. As long as they reach cooperation, they can directly transfer funds and be safe and secure. So some people say that Bitcoin's payment system represents the future.

Stocks are completely different from Bitcoin. According to the basic definition of stocks, stocks are the certificates of title issued by the company. They are issued by the company to raise funds for each shareholder as a shareholding certificate and to obtain dividends and dividends. Securities. Each share of stock represents the shareholder's ownership of a basic unit of the business. Every listed company will issue shares.

It can be seen that the stock itself is actually a withdrawal of the value of the company itself. The float of each stock represents the value that the company is currently withdrawing. For example, if the stock is good, then the total market value of the company will increase. The opposite is to reduce.

In the current financial market, there are several categories such as money market, capital market, foreign exchange market and gold market. The digital cryptocurrency market has now slowly entered people's field of vision and integrated into and become part of the financial market. And the money in these markets is actually open and can be circulated. The total amount of money in the financial system is probably fixed. If the stock market plunges, the gold market will become hot, because investors have turned their money to buy gold to hedge. For example, after the US government decided to impose tariffs on China on May 8, the price of gold soared.

People have used the gold market as a safe haven for their financial investments. After 2016, the consensus of digital cryptocurrency has gradually increased. The cryptocurrency led by Bitcoin has gradually become the direction of capital investment. In May 2019, the traditional fund custodian company Fidelity Group announced its high-profile entry into the bitcoin market and opened it. The Bitcoin mining business has also increased the confidence of ordinary investors in digital cryptocurrencies. At this point, Bitcoin has officially become an indispensable part of the operation of funds.

In this Sino-US trade war, the stock market is turbulent, and the profitability of funds also determines that when the market changes dramatically, it will definitely find a relatively stable market to hedge. In addition to the traditional hard currency gold, the capital flow has also entered the bitcoin market for safe haven. This is the root cause of the decline in stocks and the rise in bitcoin in Sino-US trade. It can be seen that bitcoin has risen strongly after May 8.

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Author: white

Source: Win and Finance – Nanjing Blockchain

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