Bitcoin (BTC) has surpassed $12,000 after almost an entire month under that level. This comes after a massive devaluation of the Chinese yuan that reached the lowest level against the U.S. dollar since August 2010. This is part of the trade ware between the United States and China.
Bitcoin Price Retakes $12,000
As the current macroeconomic outlook gets worse, Bitcoin seems to behave as a hedge against turmoil in the whole market. The Chinese yuan fell to the lowest point against the U.S. dollar in almost ten years after a massive devaluation of the currency. This led to financial markets around the world to fall as well. For example, the Dow Jones Industrial Average closed down 767 points, while the Nasdaq Composite experienced its longest losing streak since November 2016.
China dropped the price of their currency to an almost a historic low. It’s called “currency manipulation.” Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!
— Donald J. Trump (@realDonaldTrump) August 5, 2019
This price fluctuation between the U.S. dollar and the yuan is closely related to the commercial tensions between both the U.S. and China. U.S. President Donald Trump imposed tariffs to different products from China, which made it difficult for Chinese companies to remain competitive against other countries. This is why the government allowed its currency to depreciate against the U.S. dollar.
Jeremy Allaire, the CEO of Circle, suggested that the most popular cryptocurrency could be positively affected by economic uncertainty in the global financial markets.
On the matter, he commented:
“You can very clearly see some macro correlation there. I think the broader theme of, you know, Bitcoin specifically, crypto more broadly participating in these global macro forces is becoming more and more clear.”
He has also added that currency conflicts and trade wars are just some examples of what is pushing individuals towards Bitcoin, which is not controlled by any country or authority.
Bitcoin has been traded under $12,000 for over three weeks and it is now being traded above $12,200. This represents a price increase of over 34% in 8 days. According to CoinMarketCap, Bitcoin is being traded around $12,200 with a market capitalization of $217 billion and a price increase of 4,07% in the last 24 hours. This makes of Bitcoin the best performing digital asset among the top 30.
In addition to it, Litecoin (LTC) experienced a halving event on August 5, which had a short-time speculative impact on the price of the digital asset but that didn’t help it increase compared to Bitcoin.
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