Bitcoin’s impressive gains over the last week are rumored to be the result of booming institutional interest. Many investors are currently looking into alternative assets when the stock market is highly volatile. The global economy might be on edge, but Chinese investors remain calm and collected and go all-in into bitcoin.
Many experts are speculating that institutional investing is actually falling behind Chinese investors when it comes to the bitcoin price spike. With the yuan taking heavy hits due to the trade war, Chinese investors are looking for a safe haven.
It’s no secret to anyone that the Chinese government is not favorable towards cryptocurrencies. Exchanges were shut down, ICOs were banned and a mining ban is looming on the horizon. It’s more than obvious that the Chinese government and Chinese investors don’t see eye to eye on these matters.
The yuan is buckling under the pressure of the trade war and Chinese investors are beginning to rely on bitcoin. China announced their own countermeasures towards Trump’s tariffs. The measures included Chinese tariffs ranging from 5% to 25% on over $60 billion worth of United States goods. This resulted in the biggest single-day drop since July 2018.
Chinese Investors are making use of loopholes
China had already taken measures against an eventual massive dump of the yuan. The country made the yearly outflow of yuan capped at $50 000. Bitcoin however, gives Chinese Investors the opportunity to go around that ban. Even though crypto exchanges are banned, over-the-counter dealers and peer-to-peer exchanges still make this process possible.
Many rumors are flying around that traders in Hong Kong are massively dumping the Chinese yuan and moving into stablecoins. The Chinese people have always found many genius ways of getting money out of the country.
If a compromise is not reached soon, it’s more than likely that the price of bitcoin will spike a lot. While it’s very early to talk about reclaiming the $20K peak, there are many possible scenarios. It appears that currently both China and the United States are losing the trade war. Bitcoin is the only winner and if this keep going this way, the winning has only just begun.
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