As the Chinese yuan falls in value due to factors such as the ongoing commercial war with the US. UU., There are indications that locals are moving more and more funds towards Bitcoin.
According to a Bloomberg price analysis for 30 days, the negative correlation between the yuan and bitcoin has fallen to a record low in the last seven days.
While the Chinese government has previously tried to maintain the value of its national currency above CNY 7 per dollar, last month the yuan was allowed to fall below that level, falling to its lowest level for 10 years. According to reports, the measure was in response to threats by US President Donald Trumps in early August to impose a 10 percent tariff on Chinese imports.
The exchange data supports that the fall in the value of the yuan is causing a leak from Chinese investors. Bloomberg spoke with Dr. Garrick Hileman, director of Blockchain research , who said that bitcoin prices in exchanges like Huobi that serve Chinese merchants more are being negotiated with a premium.
The inverse correlation between bitcoin and the yuan also increased in April and May “as tensions increased with the deterioration of trade relations between the United States and China,” Hileman said.
The report comes as new details emerge about China’s national digital currency. The recently appointed head of the digital currency division of the People’s Bank of China said that the next digital yuan will have features that Facebook Libra does not offer.