With US president Donald Trump imposing 104% tariffs on Chinese imports, Beijing responds by letting the yuan weaken against the dollar – a step that analysts said that could spark the next leg of the Bitcoin Bull market.
On April 8, the Yuan-to-US dollar exchange rate has fallen to its lowest level since 2023, signed by the Chinese central bank’s readiness to let its money more independent.
The US dollar-to-yuan exchange rate on April 8. Source: Bloomberg
By the trade war ratcheting up, “hope for China that will eventually lower the money will jump and the pressure will not be lost,” Ju Wang, head of Greater China FX at BNP Paribas, said Reuters.
Lowering Yuan can drive a Chinese flight capital narrative to hard assets, which includes Bitcoin (Btc), according to Founder of bitmex arthur hayes.
Bybit co-founder and CEO, Ben Zhou, agreed, advised that China will let Yuan weaken to counter the trade war. This means that “many Chinese capital are flowing to BTC, bullish for BTC,” Zhou said.
Source: Ben Zhou
Bybit is the second largest crypto exchange by volume and a popular platform for derivatives entrepreneurs. In December, the exchange Says Users in Mainland China can now be traded freely on the platform without the use of a VPN but does not allow Yuan trade.
Related: $ 2T Fake Tariff News Pump Shows ‘The market is ready to ape’
The volatility of money is here to stay while the US-China trade war is eating
The change of money is part and part of a rising trade war that dives into the two largest economies against each other.
Beyond the Yuan-dollar trade, investors are cycling for the “crazy” volatility of a foreign exchange tied to the trade war, According to To Brent Donnelly, the president of Spectra FX Solutions.
The US dollar is in a steady decline from President Trump’s inauguration, with the dxy dollar index falling from a high of about 110 to the current sub-103 level.
Decline between the end of February and early March was one of the sharp motions of the last decade, according to Julien Bittelwho led Macro Research with Global Macro Investor.
DXY monitors the US dollar performance against a basket of six currencies, including Euro and Japanese Yen with the largest weightings.
The US dollar, as DXY measures, has weakened significantly in recent months. Source: Marketwatch
History, the price of bitcoin has shown A strong opposite relationship With the US dollar, with a weaker greenback associated with a higher BTC price and vice versa.
Related: As the Trump Bitcoin Tanke, PMI offers a roadmap what’s next
