Bitcoin may surge as Chinese investors hedge against yuan drop

Trump’s trade war has wreaked havoc on the cryptographic markets, Bitcoin included. However, Arthur Hayes thinks they will bring a new catalyst that investors neglect.

Since the peak in January, Bitcoin (BTC) lost more than half a bill of dollars in market capitalization, largely due to fears surrounding the trade war of Donald Trump. However, Tuesday April 8, the co-founder of Bitmex, Arthur Hayes, argued that these prices could have a positive effect hidden on the BTC.

More specifically, Hayes examines the effects that prices currently have on the Chinese yuan. On April 8, the currency struck 2023 stockings Compared to the US dollar, trading at a dollar 7.31. This drop was largely due to the fears of the effects of American prices on the Chinese economy.

Hayes believes that a weakened yuan could encourage Chinese investors to look for hedges against inflation, bitcoin as the most obvious option. He underlined similar cases in 2013 and 2015, when fears of devaluation around the Yuan aroused renewed interest in Bitcoin.

How China affects the price of Bitcoin

China has historically been an important market for Bitcoin, many considering assets as coverage against a depreciating yuan. In 2013, Bitcoin gained ground In China, in the midst of increasing concerns concerning the monetary policy of Banque Populaire de China. At that time, the Yuan exchanged 6.12 for a dollar, compared to 7.31 today.

In August 2015, the central bank devalued the Yuan by more than 3% In one day to stimulate exports and economic growth. The Bitcoin price responded, from $ 200 to $ 500 by November. These examples show how monetary policy changes can have a direct impact on Bitcoin demand.

However, Bitcoin is not the only coverage against inflation for Chinese investors. In fact, many are Goldwhich has shown constant price increases throughout the year. In addition, legal uncertainty and Narrow regulations Can prevent many ordinary investors from buying bitcoin.