FXCoin strategist known as Yasuo Matsuda has stated that the disappointment brought about by the ban on trading can be a blessing in disguise for Chinese traders who may now look forward to Bitcoin.
Yasuo, a senior strategist at FXCoin thinks that Chinese are more likely going to be Bitcoin enthusiasts now after their local currency depreciated.
The COVID-19 pandemic led to the depreciation of the Yan and this made the government to place restrictions on some activities done with the currency. But Yasuo does not think this will affect the Chinese residents so much because they have the alternative of using Bitcoins.
Yasuo thinks the Chinese will be frustrated and in a bid to get solution, they will turn to Bitcoin. He said:
“China’s strong position on legislation like the enactment of the Hong Kong national security law has been conspicuous, but the impact of the coronavirus has caused the domestic economy to fall into a recession. The incentive to move assets abroad is high, and if the legislation leads to economic sanctions from the United States, BTC will likely become even more popular.”
The strategist pointed to the fact that BTC and Yuan do not always go in the same direction so a depreciation of the Yuan may not affect Bitcoin. This can lead to more residents in China holding Bitcoins in 2020.
His words are convincing:
“…when the yuan goes down, it incentivizes residents in China to move their assets overseas because their values decline in dollar terms. This causes further depreciation of the yuan. However, as the Chinese regulation of capital flight is very strict, some see Bitcoin as the way to go. That is why BTC functions as a flight-to-safety asset. “
The trade war between the US and China in 2019 is partly responsible for the devaluation of the currency. The effect was noticeable in May and got to its worst form in September 2019. Although the Yuan tried to appreciate in January, it is still at very a low level as 1 Yuan is currently exchanged for 0.14 USD. The last time the Yuan suffered like this was in 2008.