BTC is tracking USD/Yuan exchange rate, says Forbes analyst

21 May, 2019
by David Robb
Analysis
BTC is tracking USD/Yuan exchange rate, says Forbes analyst

As the Bitcoin rally continues, many observers are looking for broader fundamental explanations for it. An increasingly popular one is that the BTC price could be correlated with the USD/Yuan exchange rate.

The latest analyst to make this case is Tokyo-based financial journalist William Pesek, writing for Forbes. He claims that the ongoing trade war between the U.S. and China, and the economic machinations of Trump and Xi, could be contributing significantly to the fortunes of Bitcoin.

Many crypto analysts that BTC is entirely 'uncorrelated' to any exchange-traded stock, bond, or national currency, and it is this that makes it such a strong candidate for a global store of value, when compared to gold or the US Dollar. Pesek, like others in recent months, has pointed out that this idea of a lack of correlation might not be entirely true. While it isn't tied to any single asset, a case could be made that the Bitcoin price is in fact tracking the USD/Yuan exchange rate with increasing closeness.

Pesek claims that a "sliding yuan tends to be Bitcoin positive. As the yuan weakens, after all, moneyed mainlanders are increasingly desperate to spirit their wealth beyond the prying eyes of Beijing’s tax collectors. This dynamic may intensify if the yuan continues its march toward the 7-to-the-dollar mark." Increasing economic uncertainty is likely to contribute positively to the Bitcoin bull market, and Pesek believes that Trump's "full-frontal assault on Chinese trade" will probably "add fuel to bitcoin’s sudden resurrection in world markets".

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