Bitcoin Spike: Should East Asia Get the Credit?

Bitcoin Spike result of trade war?

While investors are celebrating the surge in Bitcoin’s price, which has seen it rise to close on $8500 from a low of just under $6000 almost exactly a month ago, analysts are looking to find out the reason why. And top candidate for being able to take the credit for the Bitcoin spike seems to be East Asia, and currency devaluations there.

That’s certainly the stance taken by social trading and investing network eToro’s senior analyst Mati Greenspan, who tweeted that a look at the charts showed clearly that the currencies driving the surge were certainly not US dollars, which showed only a small spike and a constant tether throughout. Instead they were Japanese Yen and Korean Won that showed the major surge in volume.

US trade war with China root cause of Bitcoin spike?

Greenspan’s views were supported by ADVFN CEO Clem Chambers, who attributed the sudden spike a week ago to the devaluation of the Chinese yuan caused by the trade war with the US. He believes the rich investors grabbed Bitcoin as the way to transfer their money into something in that could easily be converted into dollars. And with the possibility that the yuan would devalue further as a result of the trade war, these investors were likely to keep their Bitcoins at least until things settled.

Should the trade war continue and get worse, the need for a safe haven for Asian money could well see the Bitcoin price skyrocketing while the stock market tumbled into chaos, according to Chambers. And it was a quicker and easier hedge to use than gold, which had long been considered to be the best solution to saving wealth when there was world economic instability. Bitcoin was likely, therefore, to attract even greater numbers of Chinese investors. On the other hand, should the trade war end, the Bitcoin spike might be over.

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