If The Yuan Falls, Bitcoin Grows
The Chinese national currency continues to fall against the US dollar. Many experts predict the continued the negative dynamics of the movement of the yuan if Washington imposes sanctions against China.
The US President Donald Trump has threatened Beijing with a tough answer if the Chinese authorities pass a security law that can help crackdown on protests in Hong Kong.
This metropolis is perceived by the United States as a special democratic territorial unit. Washington is ready to support its people in the struggle for their rights against the Chinese authorities. What kind of sanctions are we talking about? The White House did not specify, but the yuan has already reacted painfully to Washington’s threats.
In Asia, the national currency last week updated the lows. In this situation, analysts expect a surge in investment in bitcoin.
Analysts Expert Opinion
The fall of the Chinese yuan against the dollar can positively affect the value of bitcoin. This opinion was expressed by the partner of Placeholder Capital, Chris Burniske.
If China's $CNY continues to weaken against $USD, then we could have a 2015 and 2016 repeat (pictured below), where $BTC strength coincided with yuan weakness. https://t.co/ISVJAZMX5O pic.twitter.com/VApfxe1SFw
— Chris Burniske (@cburniske) May 22, 2020
He recalled that a similar trend was observed four years ago. The analyst pointed out the correlation between the weakening of the yuan and rising BTC. The graph shows that over the past five years this pattern has been interrupted only a few times. Then the strengthening of BTC coincided with the weakening of the Chinese yuan.
Matt D’Souza, Head of Blockware Solutions, shared a tweet of Burniske and also pointed to the first signs of a weakening yuan. He added that Bitcoin is already responding to what is happening:
USD/CNY is breaking out and it appears #Bitcoin is responding. This could get interesting. Capital Flight/Store of Value.
— Matt D'Souza, CPA (@mjdsouza2) May 22, 2020
Now the dollar is trading at 7.15 yuan. Analyst Matt D’Souza has predicted the trend will continue to strengthen the US currency.
The same expert believes that Chinese retail and corporate investors, in the event of a further fall in national currencies, will go not only to the dollar but also to other instruments. First of all, we should expect an increase in purchases of bitcoin, which traditionally soars in price with the deterioration of US-Chinese relations.
Disclaimer: Bitxmi News is a news portal and does not provide any financial advice. Bitxmi's role is to inform the cryptocurrency and blockchain community about what's going on in this space. Please do your own due diligence before making any investment. Bitxmi News won't be responsible for any loss of funds.