The Chinese stock market experienced a decline after reopening following the long Lunar New Year holiday. It is known that the CSI 300 Index fell by 0.6%. Meanwhile, the Hang Seng China Enterprises Index plummeted more than 2% after previously soaring 3.5% with the e-commerce sector being the hardest hit.
This situation worsened after reports regarding the decision of the U.S. Postal Service to temporarily suspend package deliveries from China and Hong Kong. This step came after China and the U.S. imposed new tariffs on each other's imported goods.
Because, although there is hope that a trade agreement can be reached, high uncertainty makes investors choose to reduce their investment risks.
"Trade competition between the U.S. and China seems to be increasing, and the current tariff policies may just be the beginning of further escalation," said the Investment Director at abrdn Plc Singapore, Xin-Yao Ng.
On the other hand, U.S. President Donald Trump stated he is in no rush to speak with the Chinese President. Meanwhile, the Chinese yuan exchange rate weakened by 0.4% at the same time.
Thus, rising trade tensions, as well as weakening stocks and the yuan, could impact the cryptocurrency industry. This is because investors may turn to digital assets like Bitcoin (BTC) as a hedge against the volatility of traditional markets.
-# Image Source: Reuters