Bitcoin as a Hedge Against Upcoming Global Market Crash

Bitcoin (BTC) has thus far flourished in 2019, surging 188% from its December lows of $3,150 to a recent high of $9,070 on May 30. This extremely bullish price action is contrary to the prices seen in traditional stock markets, as the world’s biggest economies have suffer from a minor financial downturn.

As reported by Tuur Demeester, the founding partner of Adamant Capital, Bitcoin’s bullish price action could be attributed to international macroeconomic issues that tend to have a direct impact on Bitcoin’s price.

Therefore, could Bitcoin be used as a hedge against an upcoming global market crash?

US-China Trade War Positive for Bitcoin

According to Demeester, the US-China trade war could be fueling this year’s bull run, as it is negatively affecting the Chinese yuan and appears to be positively affecting the price of Bitcoin.

In his Medium post, he said:

“On May 5th, the Chinese yuan started weakening against the US dollar, and 13 days later traded 2.5 percent lower — a huge move in forex terms. Remarkably, that was also the week that Bitcoin broke above the resistance of $6,500.”

In addition to this, the Russian international television network RT also suggested that the trade war between the two economic giants could potentially be leading Chinese investors to abandon the yuan and seek out Bitcoin in anticipation of the yuan falling further.

Furthermore, while Bitcoin and cryptocurrency trading is banned in China, Chinese traders are still managing to trade, and China has a vibrant over-the-counter (OTC) market, according to BitMEX CEO Arthur Hayes.

Hayes said that just because OkCoin and Huobi have halted operations in mainland China, doesn’t necessarily mean they have exited the Chinese market.

In fact, Hayes believes the Chinese cryptocurrency market is very strong, stating:

“The OTC market is vibrant, and these venues have found politically acceptable ways to allow buyers and sellers to meet in China. Zhao Dong, arguably the largest OTC trader in China, is one of the main people responsible for the successful $1bn Bitfinex LEO IEO. He went on the record supporting Bitfinex to the Chinese crypto community, and his clout and network helped Bitfinex win back the Chinese traders. China still matters.”

Do you think Bitcoin is being used as a hedge against an impending global market crash? Would Bitcoin thrive or suffer during a global market crash? Let us know what you think in the comment section below.


  • george
    Posted July 10, 2019 9:43 am 7Likes

    thats goood

  • Shahram
    Posted October 5, 2019 4:55 pm 5Likes

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  • hinazafar
    Posted October 21, 2019 7:36 pm 13Likes

    While both the exchange war and China’s easing back economy appear to provoke financial specialists to dump yuan for Bitcoin, there is another factor driving the wonder—the expanding authenticity among speculators of advanced digital currencies. A regional court deciding in China expressed that Bitcoin was a virtual advantage for being ensured by Chinese laws.

  • ruqayya ghulam
    Posted October 21, 2019 7:37 pm 9Likes

    The fortifying of the connection between a moderately more fragile yuan and generally more grounded Bitcoin proposes that the yuan is being utilized as a fence (for example security) during an exchange war that could apply a heavy toll on the Chinese economy.

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