The world continues to reel from the after affects of last week’s Tariffs Day. Countries across the world are reacting to new tariffs and the threat of a prolonged trade war. China has not been sitting around watching, the CCP has retaliated with reciprocal tariffs already. Could this turbulence lead to Chinese investors being bullish on bitcoin?
Over the weekend news broke of new 34% tariffs being placed on all imports from the U.S. to China. Trump retorted on Truth Social by threatening a further 50% in tariffs should China not relent.
“The US threat to escalate tariffs on China is a mistake on top of a mistake,” the Chinese Ministry of Commerce said in a Tuesday statement. “If the US insists on its own way, China will fight to the end.”
A trade decoupling between the U.S. and China appears to be on the horizon.
Will the Yuan Drop in Value?
It is widely reported that China’s central bank has loosened its grip on the yuan to make exports more appealing. On the back of up to 104% tariffs from the U.S. on Chinese imports stocks have also taken a battering in China. The Hang Seng Index has dropped over 13 percent in a week, the Shenzhen Composite Index has fallen over 10 percent in that same period.
If the yuan weakens then tariffs won’t be as much of a consideration as importing cheaper Chinese goods will remain appealing.
Ben Zhou, Founder and CEO of Bybit shared some of his thoughts on the X platform this morning. Bybit was a recent victim of the Lazarus Group which tried to steal $1.5 billion from the leading crypto exchange.
Zhou shared in his post how in 2013 and 2015 when China devalued the yuan or RMB, then a lot of capital fled to bitcoin. He wrote how “China will try to lower RMB to counter the tariff, historically, whenever RMB drops, a lot of Chinese capital flow into BTC, bullish for BTC.”
Is Bitcoin Preparing for a Bull Run?
After hitting lows of just under $75,000 yesterday bitcoin has started to go up again. Many commentators will hope that bitcoin can fulfil its promise of being a safe haven as investors look for glimmers of hope.
If what Zhou has suggested comes true then bitcoin may well return to $100,000 again. But will it go to $200,000 as some commentators have suggested? Zhou is particularly well placed to see this trend as many Chinese investors have historically used Bybit to buy bitcoin, circumventing the crypto ban that has been in place since 2021.
Author: Andy Samu
See Also:
Will Trump’s Liberation Day Cause a Stock Market Crash? | Disruption Banking
Would Donald Trump Strengthen Or Weaken The Chinese Yuan (CNY)? | Disruption Banking
Is China Going To Devalue The Chinese Yuan (CNY)? | Disruption Banking
