Bitcoin vs yuan: China’s influence on the rising price of cryptocurrency

UNITED STATES, WASHINGTON (VOP TODAY NEWS) — The price of the main digital currency rose when the yuan suddenly dropped by 7% to its lowest level in 11 years. These two events could be related.

On August 5, the price of bitcoin rose sharply to $ 11,786, an increase of 8% in one day, writes the daily RBC. At the same time, the yuan’s price has fallen to its lowest level in 11 years, reaching $ 7. Donald Trump said the Chinese government was manipulating the yuan.

“China has reduced the price of the national currency to its historical minimum. Do you hear the Federal Reserve? This is a major violation that will significantly weaken China over time!” wrote the White House tenant on Twitter.

The price of the yuan fell because of investors’ fears of a new escalation in the China-US trade war a few days after the adoption of additional US taxes on Chinese goods.

At present, US products will be more expensive for Chinese consumers, which is why the low price of the currency affects the work of US exporters. Futures contracts on US equities have already fallen, while the price of cryptocurrencies has increased.

The CNBC chain explains this dynamic through the use of bitcoin by US investors as a means of preserving value. But this is not the opinion of Peter Schiff, economist and boss of the company Euro Pacific Capital.

“Gold is a much larger market, but CNBC gives much more bitcoin time. The Chinese do not use bitcoin to preserve their funds. Speculators buy it in the hope that the Chinese will buy it too,” he says.

The latter had said earlier that bitcoin would never reach its historical record of $ 20,000. According to the economist, cryptocurrency is a financial bubble that can not be used as a means of payment because of its high volatility.

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