Economists at global investment bank Goldman Sachs believe there to be no end in sight to the ongoing US-China trade war. Although damaging to economic interests in both nations, the lack of resolution may well be bullish for Bitcoin.
The cryptocurrency has historically performed well at times of heightened geopolitical tension. This is due to its some of the asset’s hard monetary policy.
Goldman Sachs Economists Fear Trade War May Lead to Recession
According to a report in Reuters, a note to clients sent out yesterday by Goldman Sachs states that the bank is expecting that the US-China trade war won’t be resolved before the 2020 presidential election. Economists from the global banking giant also stated that they believed a recession to be likely.
The trade war has been going on now for more than a year. It has largely focused on issues relating to tariffs, intellectual property, cyber security, and technology.
The note, authored by three of the bank’s prominent economists, Jan Hatzius, Alec Phillips, and David Mericle, read:
“Overall, we have increased our estimate of the growth impact of the trade war.”
The note also stated that the bank had lowered its fourth-quarter US growth forecast
Bitcoin as a Safe Haven?
However, whatever the cause, the yuan has been depreciating in value versus the dollar a lot of late. Such economic conditions have caused some Bitcoin analysts to speculate that the recent run up in the value of the cryptocurrency has been caused by members of the Chinese public wanting to protect the purchasing power of their savings against the devaluing yuan.
If such a theory is correct, Bitcoin may benefit greatly from the continuation of the trade war and a recession following it. If capital has already been flowing from the yuan to BTC, it stands to reason that it would continue during a prolonged trade war.
“CNBC is trying its best to dupe its audience into buying Bitcoin. Despite gold being a much larger market, CNBC devotes far more airtime to Bitcoin. The Chinese aren’t buying Bitcoin as a safe haven. Speculators are buying, betting that the Chinese will buy it as a safe haven