By CCN.com: There’s a reasonable possibility that demand for Bitcoin is being driven from China, according to CryptoSlate’s Ali Martinez. Officially speaking, China doesn’t have crypto trading anymore.
The country’s court system later found that a ban on crypto exchanges and ICOs didn’t extend to banning people from possessing digital assets. As a result, just as there remains a demand for anything else in China, there’s a significant demand from the country of 1 billion.
Martinez reports that most exchanges moved their servers offshore. Nothing else about their business changed. There are several markets for the Yuan and cryptos. So, at the same time, Chinese demand for cryptos remains strong.
Bitcoin may be surging on the news of a trade war between the United States and China. Forex traders who typically hold the Bi might be dumping it in favor of Bitcoin, which has been outperforming everything while the markets have gone haywire in response to the government.
Martinez quotes Barry Silbert from a Fortune magazine article:
“If you look at over the past five years—when Brexit happened, Bitcoin went up. When Grexit happened, Bitcoin went up… [Now] it’s certainly interesting that the [Bitcoin] price started its acceleration, moving up and to the right, when the trade discussions broke down.”
It’s no secret that Bitcoin is an excellent place to look to judge the turmoil of standard markets. When people feel that markets are safe and reliable to make returns, they’ll often choose the less volatile option. But when the markets themselves are thrown into chaos thanks to the whims of Washington lawmakers, wise traders looking to increase their stack will move into crypto.
It’s this phenomenon, of old money entering crypto at convenient times, that gives us the idea that Bitcoin may itself be a hedge.
But in a nightmare scenario where suddenly cryptocurrencies are necessary, the bald truth is that we don’t know what happens with cryptos, either. The type of downturn that’s required for everyday transactions to be forced into the cryptosphere is the kind that could easily take crypto with it.
After all, if fiat currencies rapidly lose value, it typically means that more is required to get into crypto. As this trend continues, people have less real money.
If people don’t have the money to buy crypto, then it starts to break down as well. The onset of extreme globalization guarantees that countries would fall in succession. All of which raises the question of exactly how useful crypto could be in a genuinely nightmarish depression-style scenario.
The belief that Chinese demand drives the market isn’t based in drastic predictions, though. It’s based on some data, including the popularity of “Bitcoin” on China’s version of Google, Baidu. When Bitcoin spikes, interest in Bitcoin just happens to be going up and up. However, this is true everywhere – anytime the crypto prices are dancing, search traffic around crypto-related terms increases.
Last modified: July 2, 2020 7:26 PM UTC