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Taiwan and China are currently in a face-off around Taiwan’s sovereignty, affecting the Bitcoin price. The situation has come to a head after United States House of Representatives Speaker Nancy Pelosi visited the Asian country.
As Pelosi’s plane landed successfully, aircraft and navy vessels moved in the region. Tensions escalated, the price 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 on Wednesday, and the The US and Chinese navy vessels were mobilised. The Japanese air force was also involved in the process. This tension caused the Bitcoin price to fall to $22,600 during the day.
Bitcoin and altcoin markets, which declined until the Pelosi’s plane landed, then managed to rise above $23,000.
Taiwan: How Crypto Money Markets Will Be Affected
Although the leading cryptocurrency Bitcoin is described as digital gold, any increase in regional tensions and war threats have negatively affected the price of BTC.
All the while, the price of gold has increased, while Bitcoin and altcoins have faced losses. Experts say that if tensions between Taiwan and China escalate, the trend towards gold, the traditional safe asset, will increase. Also, if the risk perception increases, exits from the crypto money markets may occur.
Considering the historical data, it is safe to predict that BTC and altcoin markets will experience a decline in the event of war between China and Taiwan.
After Russia started the invasion of Ukraine, Bitcoin almost crashed. Gold prices, on the other hand, gained upward momentum.
The escalation of tensions between China and Taiwan does not be contained to Taiwan’s immediate region. Other countries will be pulled into the conflict, including the USA, Japan and the EU.
This puts the macro-economic outlook on shaky ground and leads to a decrease in risk appetite.