Chinese Yuan “inversely related” to Bitcoin Price
Back since the start of 2018 both China and the US have been involved in an intense trade war and the outcome is a significant increase in the tariffs on the import of many good and services across the country of both the respective Nations.
Due to this sudden partial rise of tension between the two Nations. But The Chinese Yuan(CNY) had a hard time as it started losing its value against the American Dollar(USD). And not the least Bitcoin (BTC) also experienced a major surge in its value and that too over the same time period.
Amazingly as noted by the firm South China Morning Post (SCMP) recorded the value of BTC which is termed as the most dominating Cryptocurrency in the world had an increase by 26.5% to $7,878 in between the time periods 5th May to 17th May.
To this, The U.S president Donald Trump made an announcement that stating now onward he would increase the tariffs on the goods imported via Mainland China.
This action clearly proves the weakening of the Chinese Yuan and to this, the Nation’s government had responded over the increased tariffs.
To this continuing conflicts and seeing the price fluctuates of both the Yuan and BTC respectively.
A Macroeconomics Researcher at London School of Economics (LSE) and Head of Research at Blockchain.com Garrick Hileman, remarked:
“We are observing a strong inverse correlation between the [Renminbi] RMB’s value and bitcoin, meaning that recent RMB declines over trade tensions have been closely matched by increases in the value of bitcoin.”
Hileman also showed concerns over the increase in the bitcoin price and said that this increase may not be related to this trade tension environment.
And mentioned:
“Trade tensions and declines in the RMB’s exchange rate as correlation does not necessarily equal causation.”
Lastly, this year is very good for Bitcoin. According to the SCMP, bitcoin’s price may have surged recently due to the generally positive remarks made about it at the Consensus 2019 conference.
