Bitcoin has dipped below $7,000 following the worst quarter-one price performance. On Wednesday at 3:10 p.m. Eastern, the world’s most popular cryptocurrency was valued at $6,905, tumbling approximately $400 from how much it was valued at the start of the day, according to CoinMarketCap.
The first quarter of the year was not kind to the token, and this year’s second quarter is not off to a great start, either. Cryptocurrencies tickers across the board were covered in red as the total value of all digital currencies fell to $258 billion, down nearly $20 billion since yesterday. While there are many variables that can influence cryptomarket prices, many experts are saying it has to do with the swirling fears of a trade war.
The Chinese government announced Wednesday new tariffs on 106 American products, including items like cars and whiskey. This move has the potential to unravel into a tit-for-tat battle between Washington and Beijing that could wreak havoc on the global economy. With this threat looming in the minds of investors, they may have tried to cut out riskier investments to prepare for potential economic turmoil.
“In the grand scheme of things, cryptos lie on (the) extremely risky end of the spectrum and are for times of hot money,” Charles Hayter, CEO of CryptoCompare told CNBC. “The hint of a trade war puts a bit of fear into the mix and as we all now markets correlate in various periods depending on the exogenous factors.”
This is the lowest bitcoin prices have been since early February, when they managed to bounce back to $10,000 in a couple of weeks. The odds of that happening again are slimmer in lieu of these new trading policies.