Chinese Bitcoin Bulls Believe Now’s the Time to Buy BTC, Seeing It Reach at Least $74,000

Francisco Memoria

Zhu Fa, the co-founder of cryptocurrency mining pool Poolin, has recently claimed he sees bitcoin hit highs of 5 million Chinese yuan ($740,000) in the future, and that he believes the flagship cryptocurrency will at least be at $74,000. Other Chinese BTC bulls have claimed now’s the right time to buy the cryptocurrency.

According to local news outlet 8BTC, Fa noted that within the cryptocurrency industry some believe the cryptocurrency’s next high will be 10-20 times above that of the last bull run, which saw it get close to the $20,000 mark. He was quoted as saying:

Bitcoin price will be in the range of 500,000 yuan – 5,000,000 yuan ($74K-$740K) in the next round of bull run.

His prediction was made on local instant messaging platform WeChat, as he was commenting a prediction made by Chinese bitcoin billionaire Zhao Dong, who believes now is a right time to buy BTC as it’s cheap.

Dong, who owns a substantial stake in popular cryptocurrency exchange Bitfinex, commented on bitcoin’s price while participating in a discussion dubbed “The Public Chain Alliance Crossing The Bulls And Bears Elite Team.” Per Zhao, barely anyone cares about BTC today, compared to the amount of people paying attention to the market in December of 2017, when it hit its all-time high.

Per his words, the cryptocurrency ecosystem will only draw in that kind of attention again when bitcoin’s price reaches “many tens of thousand[s] of dollars.” In his opinion, now’s the best time to buy crypto over its low prices, although the so-called crypto winter will reportedly last a few more months.

The bitcoin billionaire believes some companies will disappear over these next few months, and that some will emerge. He added he believes the ‘crypto spring’ will come in 2020, and that the ‘crypto summer’ will come by 2021.

Notably, Chinese cryptocurrency enthusiasts aren’t the only ones bullish on the flagship cryptocurrency’s future. Mike Novogratz, the founder and CEO of crypto fund Galaxy Digital, has recently explained why he believes the beginning of this year will be big for bitcoin.

Cameron and Tyler Winklevoss, the owners of the Gemini cryptocurrency exchange, have back in February of last year claimed they believe BTC has the potential to grow 30 to 40 times, as it can disrupt gold’s $7 trillion market.

Chinese Yuan 'Inversely Correlated' with Bitcoin, Amidst US-China Trade Wars

Since January 2018, China and the US have been involved in an intense trade war in which both countries have significantly increased tariffs on imported goods and services.

Due partly to the rising tension between the two countries, the Chinese yuan (CNY) has been losing value against the USD. During the same time period, the price of bitcoin (BTC) and other major cryptoassets has been surging.

As noted by the South China Morning Post (SCMP), the value of BTC, the world’s most dominant cryptocurrency, increased by 26.5% to $7,878 during the time period from May 5 to May 17. Notably, US President Donald Trump had announced on May 5 that he would further increase tariffs on goods imported from mainland China.

Chinese Yuan Weakens as Nation’s Government Responds to Increased Tariffs

The SCMP pointed out that the yuan dropped to its lowest level since the past six months after the Chinese government responded to Trump administration’s decision to impose higher tariffs on China.

Commenting on the price fluctuations of both the yuan and bitcoin, Garrick Hileman, a Macroeconomics Researcher at London School of Economics (LSE) and Head of Research at Blockchain.com, remarked:

We are observing a strong inverse correlation between the [Renminbi] RMB’s value and bitcoin, meaning that recent RMB declines over trade tensions have been closely matched by increases in the value of bitcoin.

“Correlation Does Not Necessarily Equal Causation”

Hileman also mentioned that we “cannot be 100% certain” that the bitcoin price has been increasing due to heightened concerns regarding trade tensions and the corresponding decline in the value of the yuan. The blockchain researcher stated:

Trade tensions and declines in the RMB’s exchange rate as correlation does not necessarily equal causation.

Hileman, who earned his Phd from LSE, revealed:

This is not the first time we’ve seen significant increases in the value of bitcoin taking place alongside yuan concerns.

He added that there’s “growing recognition of bitcoin as ‘digital gold’ and it being used as a hedge against various macroeconomic risks.”

“This Year, the Narrative Is Bitcoin, Bitcoin, Bitcoin”

According to the SCMP, bitcoin’s price may have surged recently due to the generally positive remarks made about it at the Consensus 2019 conference.

Meltem Demirors, the Chief Strategy Officer at CoinShares, a crypto treasury management firm, has also confirmed recently that the narrative this year has been mostly about Bitcoin. Demirors revealed that both institutions and retail investors are “feeling good” and are “more confident” about the long-term potential of Bitcoin and the evolving ecosystem that supports it.