Crypto rally may still continue as Chinese investors exchange assets to BTC

16 May, 2019
by Fifi Arisandi
Opinion
Crypto rally may still continue as Chinese investors exchange assets to BTC

Analysts believe that crypto price bump is related to the trade war between China and the US and that the rally will still continue. 

Cryptocurrency market has been on its best days recently, with Bitcoin’s 40% price surge only within 7 days and altcoins rising that makes people think the altseason has arrived.

Some analysts believe that the rally will keep on going as Chinese investors are currently looking to exchange their assets to dollar or Bitcoin as they fear of the continuous drop of Yuan (RMB).

The fear is reasonable as the relation between the two countries, China and the United States have been heating up recently. President Trump has decided to raise tariffs since 2 weeks ago, which has led to the 2% drop of Yuan against USD.

Yuan’s value might drop even further if President Xi decides to devalue the currency to make Chinese products’ price remain competitive for US buyers.

According to Dovey Wan, co-founder of crypto holding firm, Primitive Ventures, the rise of Bitcoin’s price these days may have many things to do with the trade war.

“Maybe just a coincidence, but you tell me,” she tweeted along with an image of charts that shows similarities between Bitcoin and the USD-Chinese Yuan exchange rate.

Philippe Bekhazi, CEO of New York crypto trading firm XBTO, also has similar opinion as Wan’s.

“I’ve talked to a bunch of traders on the ground in Hong Kong. There’s a booming business in stable coins because people are getting money out of China and Hong Kong. Asian investors are buying the price-stable cryptocurrency tether, so they can exit their native currency,” he said.

In the meantime, the Chinese government has been very cautious about any efforts to sell Yuan.

“They’ve been very stringent on moving money out of the country. Consequently, people look for any way they can take their money out … I wouldn’t be a bit surprised that bitcoin is a beneficiary of that,” said Gary Shilling, former chief economist at Merrill Lynch and president of A. Gary Shilling, an economic consulting and asset management firm.

However, it’s difficult to confirm and measure the real crypto trading volume in China due to the country’s ban of exchanges since 2017. That said, Dave Chapman, chairman of OSL, a Hong Kong OTC brokerage still believes that up to 20% of global crypto trading volume comes from China.

Despite other things that are said to become the reason behind Bitcoin’s price bump, such as news of big retailers accepting bitcoin to the technical mechanics of recent trading patterns, Bekhazi thinks the rally will still continue as he said, “Every dip is being bought, which proves to me there’s real demand.”

“It feels like a market driven by real money,” he closed his statement as quoted by Forbes.

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