Bitcoin has now lost more than 20 percent of its value over the last 5 trading sessions, trading today back below the $10,000 mark and one analyst believes the developments in the trade negotiations between China and the US may a major reason behind the fall.
In the first 10 days of August, bitcoin racked up solid gains as tensions between the world’s 2 biggest economies grew with US President Donald Trump threatening to impose more tariffs on all other goods from China starting September 1st entering the US which saw investors direct their money towards bitcoin as some sort of safe haven.
Trump has now agreed to delay the new tariffs until December so talks can resume, and this has given some hope that a compromise can be reached which saw traders exiting bitcoin and also gold.
"Now that trade tension with China has eased, the pressure on the yuan is off," Schiff said. "Those who bought bitcoin to speculate on Chinese safe haven buying, which never happened, are taking their chips off the table." Noted investor and chief executive of Euro Pacific Capital Group, Peter Schiff.
Another reason behind the fall may be the actions of regulators, and especially the SEC in the US who are stepping up plans to enforce current and introduce new laws surrounding bitcoin in light of the new market players about to enter the market and this is making investors nervous because nobody knows what will come next.
“It is without doubt that with the announcement of Facebook's libra, governments, regulators and central banks around the world have had to expedite their plans and approach to digital assets,” said Dave Chapman, executive director at BC Technology Group.
“The likes of libra and Walmart's digital currency could dramatically disrupt finance and payments” he added.