The escalation of trade conflicts is having a significant impact on the encryption market. With the introduction of a new round of tariff measures, the risk aversion sentiment in global financial markets has suddenly surged, leading investors to turn to traditional safe-haven assets. Digital currencies like Bitcoin have consequently faced large-scale sell-offs, resulting in a substantial fall in prices.

In addition, tariff policies may drive inflation levels up, thereby increasing the likelihood of interest rate hikes by the Federal Reserve. This is undoubtedly a blow to cryptocurrencies that do not generate interest income, further exacerbating market uncertainty.

However, the cryptocurrency market is not completely without hope. If the economic uncertainty caused by trade frictions continues to exist, the potential of digital currencies as alternative safe-haven assets may gradually emerge, bringing new opportunities to the market.

Nevertheless, the cryptocurrency market is likely to continue to fluctuate in the short term. Investors need to closely monitor the global economic situation and policy changes, carefully assess risks, and be prepared to respond to market volatility. During this challenging period, it is crucial to rationally view the long-term value and short-term risks of encryption.