With US President Donald Trump imposing 104% tariffs on Chinese imports, Beijing is responding by letting the yuan weaken against the dollar — a move that analysts say could spark the next leg of the Bitcoin bull market.
In April, the exchange rate between the Chinese currency and the US dollar fell to the lowest since 2023. This indicates that the Chinese Central Bank is ready to loosen its restrictions on the currency’s fluctuation.
On April 8, the US dollar to yuan rate was at its highest. Source: Bloomberg
The trade war is intensifying. “expectation for China to eventually devalue the currency has jumped and the pressure won’t go away easily,” Ju Wang, BNP Paribas’ head of Greater China FX, said Reuters.
Bitcoin and other hard assets could be a target of Chinese capital flight due to the devaluation of the yuan.BTCAccording to BitMEX founder Arthur Hayes.
“It worked in 2013, 2015, and can work in 2025,” said Hayes.
Ben Zhou is the co-founder of Bybit and its CEO. He agreed that China would let the Yuan weaken in order to combat the trade war. It means “a lot of Chinese capital flow into BTC, [which is] bullish for BTC,” Zhou, said
Source: Ben Zhou
Bybit, the second largest crypto exchange in terms of volume, is also a platform that is popular with derivatives traders. The exchange was a popular platform for derivatives traders in December. said The platform allows mainland Chinese users to freely trade without a VPN. However, yuan trading is not permitted.
Related: $2T fake tariff news pump shows ‘market is ready to ape’
As the US-China trade conflict heats up, currency volatility will continue to increase.
Currency fluctuation is part of a escalating war between the largest two economies.
Investors are bracing themselves for more than just the Yuan-dollar exchange. “insane” The trade war is causing a rise in volatility of the foreign exchange rate. according Brent Donnelly, president of Spectra FX Solutions.
Since the inauguration of President Trump, the US Dollar has continued to decline. DXY Dollar Index is down from almost 110 at its peak level today.
According to experts, the drop between late February and early march was the largest in the past decade. Julien BittelGlobal Macro Investor’s macro-researcher is.
DXY measures the performance of the US Dollar against six different currencies. The euro and Japanese yen are the two most heavily weighted.
In recent months, the US dollar as measured by DXY has declined significantly. Source: MarketWatch
Bitcoins’ price history has shown a wide range of prices. a strong inverse relationship A weaker dollar is associated with an increase in the price of BTC and vice versa.
Related: As Trump tanks Bitcoin, PMI offers a roadmap of what comes next
“This article is not financial advice.”
“Always do your own research before making any type of investment.”
“ItsDailyCrypto is not responsible for any activities you perform outside ItsDailyCrypto.”
Source: cointelegraph.com
