Last year, one of the biggest narratives in the Bitcoin market was that tensions between China and the United States – resulting in a major trade war – raised cryptocurrencies.
When President Donald Trump tweeted US relations with China, BTC responded by rising and falling with geopolitical trends. When Trump announced that tariffs would be applied to billions of Chinese goods, both Bitcoin and the US dollar jumped together against the Chinese yuan.
As the Chinese yuan started to underperform, the narration that geopolitical tensions affect the Bitcoin price started to be mentioned once again.
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Chinese Yuan is Changing
US-Chinese relations continue to return to the last quarter of 2019, but are once again warming between the two world superpowers.
In response to last year's records in Hong Kong, the Chinese government to impose strict security law in the region. The USA, which designated Hong Kong as a special economic region due to its status as the most democratic Chinese city, retaliated.
embers I said Washington will react "very strong" with the law the government and other people around the world react in the same way.
The Chinese yuan sank, breaking the resistance, as depicted in the chart below, by leading Bitcoin investor and crypto manager Matt D’Souza.
Increasing the pressure against Yuan, the US started to increase its pressure against China while it took over COVID-19 with some government members. accusation China acting complaint in the management of the outbreak.
Upgrade to Bitcoin
Analysts say this could be a boost for Bitcoin. Chris Burniske, partner of Placeholder Capital, explained:
"If China's CNY continues to weaken against the USD, we can have a 2015 and 2016 repeat where the BTC power coincides with the yuan weakness."
China & # 39; s $ CNY continues to weaken against $ US dollarthen we can get 2015 and 2016 replays (pictured below), $ BTC strength coincided with yuan weakness. https://t.co/ısvjazmx5o pic.twitter.com/vapfxe1sfw
– Chris Burniske @cburniske Instagram Profile May 22, 2020
Is there a sensuality The situation can be very good, if Bitcoin is a hedging and a valid investment for the Chinese. BTC related to yuan weakness also reflected what we saw last year.
Far From Single Macro Factor That Boosts BTC
A falling Chinese Yuan is not the only macroeconomic factor that analysts say will increase (or increase) Bitcoin at the moment.
To respond to the COVID-19 outbreak, governments and their central bank counterparts worldwide have been forced to act. According to estimates, they provided a $ 20 trillion (in USD) incentive to the global economy.
Investors like Paul Tudor Jones, a billions hedge fund manager, think that this stimulus will cause big money inflation and increase demand for scarce assets like Bitcoin.
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