Bitcoin Price Resumes Slide as Volumes Dip, China Tariffs Weigh on Bitmain
Bitcoin’s price declined on Friday, as tepid trade volumes kept the bulls in check following a stalled recovery attempt earlier in the week. On the news front, President Trump’s massive import duties on Chinese goods is beginning to take its toll on Bitmain, the nation’s largest mining harder manufacturer.
After holding above $6,500 for most of the week, bitcoin’s price fell 1.3% on Friday to $6,452. Over the last 24 hours, BTC fluctuated between $6,549 and $6,450, according to CoinMarketCap.
The bitcoin price was still trading at a hefty premium on Bitfinex following an early-week implosion of Tether, a controversial stablecoin that lost its peg to the U.S. dollar. On Bitfinex, BTC/USD is trading around $6,578.
Bitcoin’s trade volume has declined sharply throughout the week. Over the last 24 hours, BTC turnover on virtual currency exchanges amounted to $3.8 billion. BitMEX, a popular derivatives platform, continues to be the largest market for BTC trades.
Even with the slump, bitcoin’s share of the overall cryptocurrency market capitalization remained close to 54%. Bitcoin’s dominance rate has increased in recent weeks as altcoins and tokens failed to make traction. At current prices, bitcoin has an overall capitalization of $111.9 billion. At the time of writing, the combined market cap of all digital assets was $207.5 billion. More than $11 billion in daily volumes were recorded for all assets combined.
Tariff War Takes Its Toll
The Trump administration’s imposed tariff war on Chinese producers is beginning to affect the nation’s bitcoin mining manufacturers. As the South China Morning Post recently reported, Bitmain has been dealing with new tariffs since Aug. 23. Two months prior, the company’s Antminer S9 product was reclassified by the U.S. Trade Representative as “electrical machinery apparatus,” which makes it subject to new taxes.
The import duties will exacerbate an already harsher outlook for the blockchain conglomerate. Bitmain has seen a sharp drop in mining rig demand caused by the yearlong slump in cryptocurrency prices. As a result, analysts foresee sizable losses in the company’s second-quarter earnings report.
Bitmain isn’t the only China-based blockchain company feeling the pinch of a new tariff war. Canaan and Ebang – China’s other major bitcoin mining manufacturers – could see a decline in shipments and profitability in the coming months. All three companies have announced plans to issue an initial public offering (IPO) in the not-too-distant future.
President Trump has imposed tariffs on more than $250 billion of Chinese goods. While Beijing has responded with countermeasures of its own, it will not be able to match the U.S. dollar-for-dollar given its large surplus with the country.
On Friday, the Chinese government reported annual GDP growth of 6.5% in the third quarter, the slowest since 2009.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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