US Secretary of state Mike Pompeo said there was" substantial evidence " that the coronavirus occurred in a laboratory in Wuhan. Why trump's policy may lead to a repeated decline in the stock market, and in which case the price of BTC will rise to $12,000

The spread of the covid-19 stamp coronavirus began at a Chinese laboratory in Wuhan, us Secretary of state Mike Pompeo said. According to him, this is indicated by "substantial evidence, and there is no reason not to believe them," ABC News reports.

"There is significant evidence that this virus came out of the walls of the very laboratory in Wuhan… We said from the very beginning that the virus appeared in Wuhan, now the whole world can see it," Pompeo said.

He added that China's ruling party did everything possible to prevent countries from learning about the coronavirus situation in a timely manner. As a result of misinformation, thousands of people were affected both around the world and in the United States, Pompeo said. Earlier, the intelligence Alliance "Five eyes", which includes the special services of the United States, great Britain, Canada, Australia and New Zealand, prepared a report claiming that the Chinese authorities deliberately hid information on the appearance of Covid-19, and destroyed evidence of experiments with the virus in laboratories.

Should we expect a trade war between the US and China?

In early may, CNN reported that the US Administration is preparing measures against China in connection with accusations of hiding information about the coronavirus. Among the options under consideration: the introduction of sanctions and new rules in the field of trade, as well as the cancellation of American debt obligations. All this can lead to the beginning of a trade war between the US and China, according to Viktor Pershikov, a leading analyst at 8848 Invest.

"Currently, the probability of a new round of trade war between the US and China is higher than ever. Moreover, if in the first half of last year the trade standoff was primarily due to the trade deficit (China supplied 5 times more goods to the United States) and the accusations of the American side in the theft of intellectual property by China, then a new round of trade war may be the result of well-founded suspicions that the origins of COVID-19 lie not in the seafood market in Wuhan, but in a research laboratory. This reason for accusations is much more serious, since the US has suffered significant damage from the consequences of the pandemic, " Pershikov fears.

He suggested that if in the next month China does not provide evidence in favor of the wrong American position, it will cause a serious political and economic crisis. First of all, this will hit the stock and commodity markets. The situation may get worse if European countries and China's closest trading partners join the accusations made by the US and want to receive compensation for losses incurred due to the pandemic, the expert admitted. Vladislav Antonov, an Analyst at IAC Alpari, holds a similar position. He agreed that a trade war between the US and China is possible and added that some of the States have already brought charges against the PRC.

"A trade war is possible. Pompeo is talking about sanctions, and trump is talking about raising duties. The us President considers raising tariffs on Chinese goods as one of the measures to hold China accountable for late provision of data on THE covid-19 coronavirus outbreak. the US is now investigating whether the appearance of the coronavirus was intentional or accidental. Some American States have already filed lawsuits against China, accusing it of spreading the infection. The Chinese foreign Ministry called the claims by the US absurd, " Antonov said.

How the trade war will affect the stock market

Pershikov continued that the violation of trade relations between the countries will lead to an even deeper fall in the markets than what happened in March. Then the value of the leading us s&P 500 index, which includes shares of the 500 largest companies by capitalization, fell to 2,237 points. Now it has recovered to 2830 points.

"Against this background, I expect a fall in classical markets comparable to the March collapse or even more significant. Currently, the growth of stock assets is only a result of fresh liquidity that the US Federal reserve is pumping into the markets. The explosion of the" bubble " in the stock market will lead to their collapse, as well as to an increase in the price of gold to the level of $2000. This will be followed by a fall in the yuan's quotes, " the expert predicted.

Here, analysts ' opinions differ. Antonov suggested that the trade war between the countries would have an impact on the stock market, but it would be less significant than the economic consequences of the coronavirus pandemic. Many stocks have already fallen significantly in price, and investors intend to use this.

"At the time of the escalation of the conflict between the US and China, the entire market was falling. The coronavirus hit the States much harder. After the collapse of the market in March by 37%, it is unlikely that anyone will pay attention to this now, because everyone wants to earn money and buy out cheaper shares, " Antonov believes.

He said that the deterioration of relations between the US and China will lead to a moderate decline in the market. US President Donald trump warns in advance how much the duties will be increased. Therefore, investors and traders will have enough time to quickly analyze the industry and make a decision on reviewing portfolios, the analyst is sure.

How will cryptocurrency react to a possible trade war

Antonov continued that the escalation of the conflict between the US and China may strengthen the position of bitcoin, as it happened in 2019. A trade war can cause a decrease in the correlation between cryptocurrency quotes and the S&P500 index. The reason is that in such conditions, Asian market participants are actively investing in digital assets, using them as security or to circumvent sanctions, Antonov explained. According to his forecasts, if the tension in the political arena increases, then BTC may rise in price to $12,000.

This is also the position of Writer. He also noted that the growth of the bitcoin exchange rate to $14,000 last year occurred during the US trade conflict with China. Probably, this time the violation of relations between the countries will also contribute to the rise in price of the coin, the expert believes. He added that a number of fundamental factors will help this.

"Last year, at the height of the trade war, the price of bitcoin rose. It rose to $14,000, demonstrating the properties of a protective asset. There is no reason to believe that this year BTC will behave differently, especially since there are many positive aspects fundamentally in the cryptocurrency market. One of the most relevant factors is the permission of OKex and Huobi exchanges from the financial authorities of China to provide services to Chinese citizens. This will certainly lead to a surge in the activity of Chinese traders and the arrival of new participants in the crypto market, which will bring fresh liquidity to bitcoin and altcoins, " Pershikov concluded.

Cryptocurrencies are winning

Experts agreed that there is a high risk of a trade war between the US and China. However, it is difficult to predict how this will affect the stock market: the fall may be gradual and insignificant, or sharp and deeper than it was in March.

Cryptocurrencies, on the contrary, will react positively to the trade war between the US and China, experts believe. Bitcoin and other digital coins can act as protective assets, as well as be used to circumvent sanctions. With this development, BTC will become more expensive, perhaps its price will rise to $12,000.