BTC remains bullish as trade war continues

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Aug 6, 2019

The ongoing trade war between United States and China has escalated yet again following Trump's tariff on Chinese goods last week . On Monday, in response to the latest U.S tariff hike, China weakened its Yuan by allowing it to slide past the key 7-per-US dollar level that's unseen in over a decade. This essentially offsets any effects of the tariff.

Interestingly, Bitcoin continues its rally towards $12,000 as the Yuan fell, suggesting that the Chinese might be moving their Yuan to Bitcoin instead to hedge.

Crowd's reactions

  • Today's pump is sponsored in part by the Yuan.
  • Chinese currency, Yuan, is currently very weak against the US Dollar. Chinese will want to dump their money into alternative investments (Gold, Bitcoin).
  • BTC passed the $11k today. I hope BNB and other altcoins follow the trends.
  • It's so essential to own as much btc as possible in current times
  • i was expecting btc to go down at 10400
  • Btc has killed alt

Chinese are buying Bitcoin... or are they?

Looking at the social volume, the majority of the crowd believes that the Yuan devaluation is responsible for Bitcoin's rise recently.

So are the Chinese really using Bitcoin as a macro hedge? Dovey Wan lends another perspective to this narrative.

According to her,

"Chinese buying up Bitcoin" is a VERY dubious narrative IMO
1. Bitcoin is trading at a negative premium in Chinese centric exchanges like Huobi and Okex
2. RMB denominated OTC price is now at 1% premium, within its normal range since the bull
I personally think the overall global financial uncertainty does help push up the market, but capital might come from the non-Chinese side more than the Chinese side. Gold, on the other hand, saw a real spike in volume and prices from the CNY denominated trading pair
if they really want to hedge global financial uncertainty, especially local currency devaluation, Tether is the go-to place.. instead of Bitcoin (sorry to let you guys down). BTC is more a long term hedge by some high net worth ppl. However, Tether is now at negative premium too

So who's buying Bitcoin?

Could it all just be a self-fulfilling price expectation by speculators based off the widespread "Chinese are buying Bitcoin" narrative?

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Aug 6, 2019

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