China Is Being Eyed by the U.S.
On Thursday, President Trump explained to a room full of reporters that he and fellow regulators are looking into what their options are for dealing with China. The nation is widely blamed for the release of the coronavirus on the world, and Trump is potentially looking to initiate economic strikes against China in the form of further sanctions and tariffs.
The President has already sought compensation from the country. He explained to reporters:
We’ll be announcing what we’re doing tomorrow (Friday) with respect to China, and we are not happy with China. We are not happy with what’s happened.
The fact is that bitcoin has a rather healthy presence in China, so if symbolic sanctions are taken against the country, analysts can’t help but wonder what will happen for the asset’s price. Will it sink to record lows, or will its status as a “safe haven” asset grow in the coming months as more people become worried about the state of their economy?
Phillip Gillespie – CEO of B2C2 Japan – explained that he thinks the situation could be good for the world’s number one digital asset by market cap. In an email interview, he explained:
I expect serious anti-Chinese rhetoric in the coming days/ weeks/ months as Trump tries to use nationalism, protectionism and anger towards China and COVID as a major catalyst for support. I am personally bullish [on bitcoin] due to a combination of excess stimulus from all the major central banks (ample liquidity in the system) and pick-up in geopolitical risks.
Cryptocurrency tracking company Stack offers similar sentiment. In a new report, analysts suggest that the desire for bitcoin has exploded in recent weeks thanks, in part, to rising tensions with China. It also points out that the yuan is sliding in price, which in the past, has often proved beneficial for the cryptocurrency. They’re confident bitcoin’s weekly gains will only get larger from here as the circumstances become less and less certain.
The Situation Looks Good for BTC
The report states:
Previously, back in 2019, similar fears have driven Chinese investors to move their onshore RMB (China’s yuan) out of the country, where speculators reckon a part of that has trickled into Bitcoin given the increased demand over the same period. We are observing similar price action currently as bitcoin has rallied 6.2 percent since, from $8,700 to the $9,250 level, once again breaking out from its 2019-2020 daily trendline.
With companies like Bitmain and Canaan Creative to its name, China has a lot to lose in the cryptocurrency space granted tensions with America become too strong. The asset boasts a strong presence in China despite the nation’s attempts to outlaw it completely in the past.