The global cryptocurrency community may be able to thank U.S. President Donald Trump for increase adoption of digital currencies. His feud with China over an improperly balanced trade industry has resulted in more Chinese beginning to turn to crypto, which is going to help push worldwide awareness and adoption even higher at a much faster rate. This is according to analysis provided by Bloomberg as it explored the correlation between the Chinese yuan and Bitcoin over the last 30 days.
The yuan has dropped in value as a result of the ongoing trade war and more Chinese than ever appear to be seeking solace in digital currencies. The last week has been particularly interesting, with the largest inverse relationship seen between the two currencies appearing during this time.
According to a London School of Economics research and the research director for Blockchain.com, Dr. Garrick Hileman, “There’s corroborating evidence for this, in that people in Asia were paying more for Bitcoin than elsewhere when the yuan fell. You can see it in the premium price paid sometimes for Bitcoin in exchanges like Huobi that primarily cater to Chinese.”
In conjunction with a weakened yuan that has resulted from increased tariffs on Chinese products, as well as just the threat of increased tariffs, China has also developed domestic policies that have facilitated crypto growth. This past July, a Chinese court asserted that crypto is a legitimate virtual asset that is protected by law, giving the general public an added sense of security in adopting digital currencies.
That ruling didn’t necessarily include a decision that crypto is ready to be considered fiat, although the country is said to be developing its own stablecoin. China still has a ban on crypto exchanges and crypto-related crowdfunding activity, but it would seem that the country is at least willing to recognize the value digital currencies provide to society.
Where the trend goes from here remains to be seen. If Trump continues to exert pressure on China, it could further weaken confidence in the yuan, which would only lead to even more crypto adoption. Even if no more tariffs are introduced and trade agreements are stabilized, the wheels have already been put in motion and more people now see that crypto is easy to use and provides greater independent stability than a state-backed currency of any kind.
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