Bitcoin Gain Strength from Weak Yuan says FXCoin Strategist

FXCoin, a Japan-based crypto firm, had its senior strategist, Yasuo Matsuda, speak out regarding the effect of a loss in value of the Chinese Yuan. Particularly, how it may lead more people to become a Bitcoin trader in such strange times in the chaotic year of 2020.

Matsuda: Weaker Yuan Will Drive Bitcoin Adoption

Matsuda spoke during an interview with Cointelegraph Japan. Within this Interview, he explained that the Bitcoin would stand to be more popular among Chinese Nationals. This is due to a large number of these nationals suffering from the national security laws that were put in place as a response to the COVID-19 pandemic, causing economic sanctions.

Matsuda explained that China’s recently strong position when it comes to legislation has been conspicuous. A prime example of such a case would, obviously, be the Hong Kong national securities laws. However, Matsuda was quick to highlight the domestic economy going down due to the ramifications of the COVID-19 pandemic, causing it to go into recession. The FXCoin strategist believes that this will serve as an incentive to move assets abroad. This is doubly so, if the new legislation leads to US sanctions, inevitably leading Bitcoin to be more popular.

Yuan And Bitcoin Correlated Differently

It was quickly pointed out by Matsuda, however, that the Yuan and the BTC aren’t always correlated the same way. Sometimes a strengthening Yuan led to a stronger BTC, as well.  However, there’s a definite possibility that the Yuan going down would lead to a majority of Chinese traders to buy Bitcoin in 2020.

Matsuda explained that a dropping Yuan causes the traders to want to move their assets overseas. This comes as a direct response to the traders trying to circumvent the loss of value in dollar terms that can occur. As this happens, the Yuan will drop, even more, building its own momentum. However, China has countermeasures in place, putting out strict regulations when it comes to capital flight. Matsuda believes that this will cause many traders to go for Bitcoin and why Bitcoin can serve as a haven asset.

Giants Contending

The Yuan has had a tough stretch, as of late. The drop had started alongside the start of the trade war between China and the US, back in 2019. It had dropped down sharply in May of last year, reaching its low in September. Since January, however, the currency had experienced a proper rebound, but now it’s at its lowest for 2020: 0.1404 USD. This price stands close to values the country had only shown back in 2008.