{"id":424907,"date":"2020-05-24T02:00:06","date_gmt":"2020-05-24T02:00:06","guid":{"rendered":"https:\/\/wncen.com\/?p=424907"},"modified":"2024-06-11T13:49:14","modified_gmt":"2024-06-11T13:49:14","slug":"the-chinese-yuan-is-falling-once-again-and-thats-key-for-the-bitcoin-bull-case","status":"publish","type":"post","link":"https:\/\/wncen.com\/news\/the-chinese-yuan-is-falling-once-again-and-thats-key-for-the-bitcoin-bull-case\/","title":{"rendered":"The Chinese Yuan is Falling Once Again \u2014 and That’s Key for the Bitcoin Bull Case"},"content":{"rendered":"

Last year, one of the biggest narratives in the Bitcoin market was that tensions between China and the U.S. \u2014 which culminated in a massive trade war \u2014 was pushing cryptocurrencies higher.<\/p>\n

Whenever President Donald Trump tweeted about U.S. relations with China, BTC responded, both rising and falling with the geopolitical trends. Once, when Trump announced that tariffs would be applied to billions worth of Chinese goods, both Bitcoin and the U.S. dollar against the Chinese yuan jumped in tandem.<\/p>\n

With the Chinese yuan starting to underperform, the narrative that geopolitical tensions are influencing the Bitcoin price has begun to be mentioned once again.<\/p>\n

Related Reading: Crypto Tidbits: Satoshi Isn\u2019t Dumping His BTC, China \u2018Bans\u2019 Cryptocurrency Mining<\/a><\/h6>\n

The Chinese Yuan is Faltering<\/h2>\n

Although U.S.-China relations were back on the mend heading into the last quarter of 2019, it is once again getting heated between the two world superpowers.<\/p>\n

Responding to the record Hong Kong protests last year, the mainland Chinese government is looking to impose<\/a> a stringent security law on the region. The U.S., which designates Hong Kong as a special economic zone due to its status as the most democratic Chinese city, has retaliated.<\/p>\n

Trump said<\/a> that he and Washington would react “very strongly” should the law pass, with others in government and around the world reacting the same way. <\/a><\/p>\n

The Chinese yuan, as such, has sunk, breaking out of resistance as prominent Bitcoin investor and crypto executive Matt D’Souza depicted in the chart below.<\/p>\n

\"Chart
Chart of USD\/CNY trading pair from Matt D’Souza, CEO of Blockware Solutions and Blockware Mining and a prominent Bitcoin investor.<\/figcaption><\/figure>\n

Adding to the pressure against the yuan, the U.S. has begun to increase its pressure against China over its handling of COVID-19, with some members of government accusing<\/a> China of acting complacent<\/a> in the handling of the outbreak.<\/p>\n

Boost to Bitcoin<\/strong><\/h2>\n

Analysts say that this could be a boost to Bitcoin.\u00a0Chris Burniske, a partner at Placeholder Capital, explained:<\/p>\n

“If China’s CNY continues to weaken against USD, then we could have a 2015 and 2016 repeat, where BTC strength coincided with yuan weakness.”<\/p><\/blockquote>\n

\n

If China's $CNY<\/a> continues to weaken against $USD<\/a>, then we could have a 2015 and 2016 repeat (pictured below), where $BTC<\/a> strength coincided with yuan weakness. https:\/\/t.co\/ISVJAZMX5O<\/a> pic.twitter.com\/VApfxe1SFw<\/a><\/p>\n

— Chris Burniske (@cburniske) May 22, 2020<\/a><\/p><\/blockquote>\n