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After five months of cease-fire, the trade war between the two countries is worsening day by day. This is good news for Bitcoin.
Bitcoin price for many reasons is pumping
Ask any key player or analyst in the banking industry why the price of Bitcoin increases and you will probably get a different combination of answers.
Before the race, coordinated purchasing, large business movements and even the role of Bitfinex and Tether are all perfectly plausible reasons. But perhaps there is a more important factor here that attracts investors towards Bitcoin: the trade war between the United States and China.
The trade war between the United States and China is getting darker day by day
Last week, President Trump rate increase up to 25% $ 200 billion in annual Chinese imports. He also threatened to impose further increases of 300 billion additional dollars of Chinese products.
In addition, on Wednesday, the Trump administration took dramatic steps to add the blacklist of its exports to Huawei and effectively ban the company from selling its technology to the US market.
This action against the Chinese mobile giant will certainly provoke a catastrophic reaction from Beijing, and its effects will be felt around the world. It is an act of aggression on the part of the United States that will not only harm the Chinese technology society, but also the global technology supply chains.
Paul Triolo, Technology Policy Expert at Eurasia Group Risk Consultancy quoted in FT, have noticed:
The United States has openly declared its willingness to embark on a full-blown technological war with China
While actions collapse in this dangerous game in which there can only be losers, all action gives Bitcoin a boost. More than one analyst has called Bitcoin "well protected" as gold. Max Keizer commented on the billion dollar fundraising by Bitfinex:
Bitcoin attracts large sums of money while China prepares to lower the ax in USD.
Anthony Pompliano, co-founder of Morgan Creek Digital, tweeted yesterday:
Bitcoin is the best safe haven in the world.
JP Morgan tells people that the trade war between the United States and China could boost safe haven currencies.
Bitcoin is the best safe haven in the world.
Nervous about global chaos ??
Buy the strongest non-sovereign currency.
– Pomp (@APompliano) May 15, 2019
The Chinese yuan in free fall
The Chinese yuan hit a five-month low against the dollar yesterday, depreciation of more than 6.9 against the US dollar-The lowest level since December.
It could be argued that a weaker currency makes exports cheaper, but there is also Bejing's real concern about capital flight.
Maybe just a coincidence but you tell me
Bitcoin is winning the trade war while China and the United States are a loser-loser pic.twitter.com/8FmVcaHjjh
– Dovey Wan ? ? (@DoveyWan) May 13, 2019
And in fact, if you look at the table below provide by Zero Hedge you will already see a "strange correlation" between Yuan and Bitcoin.
Perfect geopolitical storm for Bitcoin
A weak yuan, a strong dollar, the certainty of China's retaliation and increasing supply pressure on crude oil are driving up prices, creating a perfect geopolitical storm for investors looking for assets in search of security.
While Trump seems determined to continue his Russian roulette game with China, bitcoin is proving a safer bet.
Will the price of bitcoins continue to climb because of the growing division between the United States and China? Share your thoughts below!
Images via Shutterstock, zerohedge
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