The uncertainty around the fact the ‘Chinese are buying Bitcoin’ continues to baffle the crypto community. As their Sovereign currency was taking a hit in the wake of the US-China trade war and imminent economic crisis, it was only logical that Bitcoin [BTC] demand might increase.
While the findings by crypto-analysts suggested differently, a report on Financial Times times indicates a rise in trading volume in China.
Due to the ban imposed on Chinese cryptocurrency exchanges, the Chinese mostly rely on off-shore crypto-exchanges in Hong Kong and Singapore for trading. Taimur Baig, chief economist for DBS in Singapore noted,
“We have seen a big rally,” describing the falling renminbi as evidence of a “serious use case for crypto”. He added: “From now on it is another thing for markets to watch.”
Furthermore, Babel Finance, a Beijing-based cryptocurrency financial services provider, also reported a 50% increase in trading volume over the past ten days.
The global economic crisis has reached a brimming point; the financial debts of countries are at an all-time high. Mati Greenspan, the Senior Market Analyst at eToro said in an interview,
… yields across the board are extremely low and in many cases negative. Right now we’re looking at about 15 trillion dollars worth of negative-yielding bonds across the globe
Nevertheless, the safe haven narrative of Bitcoin is also not as strong as the crypto-markets currently perceive. He said, “0.2 correlation… It is just not a very strong one”, but it has grown to this level mainly during 2019. He also added,
We did see a big spike in crypto volumes [during the last few days]. Not specifically in Hong Kong and China but from the entire world.
Can We Expect Another Surge in Bitcoin in the Coming Week?
Last but not least, the absence of retail investors has also been witnessed from this year’s Bitcoin [BTC] run. Hence, it has been mostly attributed to ” people who are already familiar with crypto,” Tether manipulation, and a surge of institutional investors.
Mati noted that even 0.25% of the allocation to Bitcoin by a large hedge fund or asset manager has the potential to create a massive spike in Bitcoin.
Furthermore, the 39th Economic Policy Symposium in Jackson Hole, Wyoming, is due on the 22-24th August 2019. The meeting of the world’s leading Central Bankers as they make tough decisions on the economy will be one to watch out for.
The Feds recently cut rates by 25 basis points in July, and according to expert views, we could expect more at the meet.
Scott Minerd, the CIO at Guggenheim Partners, told the media,
“Given the fact that the Fed is boxed in the way it is, they should just go ahead and cut rates dramatically, let’s say by half a point and probably do it inter-meeting and basically get this over with.”
A Hong-Kong based health fund manager also said the press that Bitcoin is added to his list of investments. He also predicted a “more super dovish talk from the central banks” from the meeting, which could give another boost to cryptocurrencies.
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