Heightening geopolitical tensions pose a risk of fragmenting blockchain networks and limiting users’ accessibility, crypto leaders conveyed to Cointelegraph.
On April 9, US President Donald Trump declared a halt in the implementation of tariffs levied on specific nations — yet the possibility of a global trade conflict still persists, particularly as Trump aims to impose a 125% tax on Chinese imports.
Executives from the sector expressed concern over a range of potential ramifications if relations deteriorate, including interruptions to the physical frameworks of blockchain networks, fracturing of regulations, and suppression of content.
“Harsh tariffs and retaliatory trade measures could present hurdles for node operators, validators, and other essential participants in blockchain frameworks,” Nicholas Roberts-Huntley, CEO of Concrete & Glow Finance, mentioned to Cointelegraph.
“During periods of worldwide uncertainty, the system supporting cryptocurrency, beyond just the assets themselves, can suffer collateral damage.”
Based on data from CoinMarketCap, the total market value of cryptocurrencies diminished by roughly 4% on April 10 as traders pondered contradictory signals from the White House regarding tariffs amidst widespread economic stress.
Crypto’s market capitalization fluctuated on April 10. Source: CoinMarketCap
Related: Trade tensions accelerating institutional crypto adoption — Executives
Weaknesses of Bitcoin
Bitcoin (BTC) is particularly susceptible to a trade dispute due to the network’s reliance on specialized machinery for Bitcoin mining, such as the ASIC chips utilized for resolving the network’s cryptographic challenges.
“Tariffs disrupt established ASIC supply chains,” David Siemer, CEO of Wave Digital Assets, informed Cointelegraph. Chinese suppliers like Bitmain play a crucial role for miners.
Nevertheless, “the more significant threat is the weakening of blockchain’s fundamental value proposition—its global, unrestricted infrastructure,” Siemer stated. This situation could pose significant issues for average crypto holders.
“If international trade collapses and capital controls become stricter, it might become increasingly difficult for individuals in oppressive countries to acquire bitcoin,” commented Joe Kelly, CEO of Unchained. “Governments could intensify scrutiny on exchanges and on-ramps, complicating accumulation and usage,” Kelly further explained.
Bitcoin’s performance against stocks. Source: 21Shares
Paradoxically, these kinds of concerns also highlight the significance of cryptocurrencies and decentralized blockchain networks, the executives noted.
Bitcoin has already demonstrated “signs of resilience” amidst the market volatility, demonstrating the coin’s potential in hedging against geopolitical uncertainties.
“Although the circumstances are challenging, they also provide an opportunity for crypto to showcase its long-term significance and utility on the global platform,” remarked Fireblocks’ executive Neil Chopra.
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