Over the past couple of days, Bitcoin (BTC) has shown impressive growth of about 10%, which for many was quite unexpected. Comparing the current BTC situation with 2016, analysts and experts believe that soon the instability of the Chinese yuan against the dollar may change the country's position in relation to cryptocurrency .
Many people compare the parabolic movement of Bitcoin in 2019 with the movement of 2016 and 2017, at the end of which the cryptocurrency reached its record high price of about $ 20,000. Now that Bitcoin has grown by more than 270% since the beginning of 2019, this seems more or less justified .
However, many industry experts and analysts, including Alex Saunders, CEO and founder of Blockchain Education, believe that since 2012, one of the key differences is China’s position.
“Most cryptocurrencies did not exist in 2016, in addition, then there really was bitcoin fever in China. If their currency continues to weaken, it can be argued that they will use BTC again. Today, the breakdown was very significant … "
Most crypto participants weren't around in 2016 when China really had #Bitcoin fever. If their currency continues to weaken, you can bet they will be chasing that $ BTC feeling again. Breaking the 7 peg today is significant … pic.twitter.com/u1xQlZG90v
– Alex Saunders (@AlexSaundersAU) August 5, 2019
It is noteworthy that even before China announced a general ban on all cryptocurrency operations on exchanges , the country had a serious impact on this market. The activity of Chinese investors accounted for a significant share of the overall market, so their actions directly influenced its development.
The two largest producers of cryptocurrency miners in the world – Bitmain and Canaan – are Chinese companies, they occupied a high percentage of the network’s hashrate.
However, subsequently, the People's Bank of China (PBoC) banned the use of tokenized securities, later the Chinese government imposed a ban on all commercial activities related to cryptocurrencies.
It is worth noting that then the Chinese yuan looked stronger against the US dollar, which is reflected in the chart below.
In 2019, the position of China in relation to bitcoins and cryptocurrencies from the point of view of legislation continues to remain negative, although some positive changes have recently occurred.
Last year, President Xi Jinping called blockchain technology part of the “new industrial revolution,” which raised hope that the ban would be lifted.
In addition, tension between China and the United States intensifies, especially after U.S. President Donald Trump announced the next imposition of duties on Chinese goods destined for import into the United States in the amount of $ 300 billion.
Against this background, the Chinese yuan is becoming increasingly unstable against the US dollar, reaching 11-year lows.
According to the popular Bitcoin bull and the former Wall Street hedge fund manager Mike Novogratz, the above can cause another Bitcoin rally.
“With the yuan above 7.0, the currency war, the instability in HKG and the start of capital flight, the BTC rally is gaining more and more chances.”
With the yuan over 7.0, an FX war, instability in HKG and the beginnings of capital flight, $ Btc rally could have real legs.
– Michael Novogratz (@novogratz) August 5, 2019
Publication date 08/06/2019
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