News

The US raised tariffs on Chinese products. China retaliated by weakening the yuan to levels not seen since 2008. Now, as a consequence, what we all fear with this trade war is beginning to escalate to dimensions far beyond trade. This includes a currency war between the top two economies of the world with the US Fed and the People’s Bank of China being encouraged to prepare more cuts if the trade war intensifies. For all that is worth, interest rate cuts will just debase these currencies with investors and speculators flying to investment vehicles with no political agenda – cryptocurrencies or precious metals.

As of this writing, the global central banks have embarked on easing rates worldwide; Bitcoin is flirting around the $12k mark as profit-takers speculate and capitalize on rising prices. By technical indications, it rose above the 20-day EMA on August 1 which is a bullish sign. With all the drama and instability of even the strongest fiat currencies – we now test the strength of an apolitical Bitcoin and look into the 3 of the main reasons why cryptocurrencies are worth considering.

1. Major markets are tumbling.

As tensions continued between the US and China, the DJIA and Nasdaq fell 2.9% and 3.4% respectively last Tuesday. Consequently, Bitcoin gained 3.2%. Is this a flight to safety or just pure coincidence?

2. Investors are now more accepting of Bitcoin.

If you have a LinkedIn account, you won’t miss the daily gospel of bitcoin in your feed from specialist and subject matter experts. We are talking ex-Goldman Sachs and ex-JP Morgan executives who have turned their faith to embrace this digital asset. Bitcoin and related cryptocurrencies are now being used as a hedge. As blockchain lawyer and cryptocurrency advocate Jake Chervinsky noted, “Bitcoin is doing exactly what it is designed to do.” That is to reduce a portfolio’s dependence on the centralized financial system.

3. Bitcoin wins the currency Wars.

If there is a sure winner from these currency wars, look no further. While two of the world’s major economies play the blame game of who started which, confused and rattled investors parks their funds to bitcoin. The US just recently accused China of being a currency manipulator, this after China allowed the yuan to slide further against the dollar. Obviously, a cheaper yuan means cheaper Chinese imports. If you choose to buy one pair of shoes with one dollar, a devalued yuan will allow you two pairs of shoes. Businessmen will always find ways to get those cheaper goods to American soil. (Smuggle them perhaps)

As Cointelegraph reports, it’s the Chinese investors who are looking at the cryptocurrency markets more aggressively. This is because they want to get a better conversion from their dollar over time, as they dump the greenback. The obvious shift is to Bitcoin and crypto.

As we forecast; It is an exciting time for cryptocurrencies, and we predict the excitement has only just begun. For all that it is worth, be reminded that it only has value - as long as you are connected to the internet.