Chinese investors are trying to exchange the Yuan for bitcoin, as fears mount due to ongoing devaluation of the yuan.
Following the decision of U.S. President Trump to levy further tariffs on Chinese goods over the past two weeks, the yuan has fallen 2% against the dollar.
Adding to this, the yuan has steadily lost value against the dollar over the last year.
Investors predict that President Xi Jinping will engage in further devaluation of the currency to prop up Chinese goods by making them more competitive, price wise, with U.S. goods despite tariffs.
CEO of crypto trading firm XBTO, Philippe Bekhazi states:
I’ve talked to traders in Hong Kong. Stable coins are booming because people are getting money out of China. Asian investors are buying the price-stable cryptocurrency tether so that they can exit their native currency
Philippe Bekhazi, XBTO
Meanwhile, the Chinese government has continues to enact policy to slow capital flight, and reduce negative pressure on the yuan.
They’ve been very stringent on moving money out of the country. Consequently, people are looking for alternative ways to take their money out. I wouldn’t be a bit surprised that bitcoin is a beneficiary of that
Gary Shilling, Former Chief Economist at Merrill Lynch