Bitcoin Price Surges 10% to Above $11,800 As China Devalues Its Currency

Siamak Masnavi

According to CryptoCompare, at 07:42 UTC on Monday (August 5), the Bitcoin price went above the $11,800 mark. This article considers what might be behind this latest rally.

At press time (07:47 UTC on August 5), BTC-USD is trading at $11,834, up over 10.55% in the past 24-hour period:

BTC-USD (24 Hour) - 5 August 2019.png

This the first time that Bitcoin has seen this level since July 20. 

You could say that Bitcoin had a good weekend since between 00:00 UTC on August 3, when the BTC price was $10,518, and 00:00 UTC on August 5, when the BTC price was $11,212, its price rose 6.6%.

So, what are some of the positive macro factors behind this latest rally?

Su Zhu, CIO and CEO at Singapore-based Three Arrows Capital believes that due to the escalating trade war between China and the U.S., China might be considering trying to get around the higher U.S. import tariffs for some of its goods by devaluing its national currency, the Renminbi (RMB), which is also known as the Chinese Yuan (abbreviated CNY or CNH depending on whether it is traded onshore or offshore), and allowing USD/CNH to rise above the symbolic level of 7.00:

In fact, the USD-CNH rate reached 7.03 earlier today, a level last seen in March 2008.

Also, the recent protests in Hong Kong (over proposed extradition bill), which have led to today's general strike over there, might be causing more Chinese investors to get into safe haven assets such as Bitcoin and gold, the price of which went over 10,000 CNY earlier today, according to Dovey Wan, Founding Partner at Primitive Ventures:

Wan also believes that the escalating trade war between Japan and South Korea might also be acting as tailwind for Bitcoin:

Indeed, over on South Korea's KOSDAQ (an electronic stock market like NASDAQ), things are not looking so good:

As for the altcoins, Bitcoin's strong price action seems to have lifted the mood of the whole crypto market, with most of the top 100 cryptoassets currently in the green.

Here are how a few of the most popular altcoins are currently doing:

Altcoins 24 Hour CC Chart - 5 August 2019.png

Featured Image Credit: Photo via Pixabay.com