Just a few days after declaring a traffic ceasefire with the Chinese leader Xi Jinping, U.S president Donald Trump posted a tweet on Wednesday accusing China and Europe of manipulating their currencies in order to gain economic advantages over the United States, which eventually affected the Bitcoin value.
Trump’s tweet came hours after the Commerce Department released data showing in May a massive jump in the U.S. trade deficit, which the president has struggled to narrow.
Although the U.S refrained from calling China a “currency manipulator” in late MAY, Donald Trump is again accusing China of having deliberately undervalued the Yuan in order to make their exports and tradings more attractive.
However, Chinese officials have denied any accusations and said that the Yuan’s value and exchange rate are set by the market. Chinese official Li Bo said, “We won’t use policy to devalue the yuan and we won’t use the exchange rate as a weapon to react to external pressures from trade conflicts”.
How did this influence the Bitcoin?
Meanwhile, the Bitcoin proved itself to be a safe haven for investors and users of cryptocurrencies in times of economic tension and national uncertainty, Chief Engagement Officer at the Global Blockchain Business Council said:
While we do not see the direct flows of who is buying bitcoin, we can see that the bid for bitcoin in this latest run has coincided with a big downtick in the value of the Chinese Yuan versus the dollar.
Further, a rally in the world’s first and largest cryptocurrency these last months has coincided with a tick down in the Chinese Yuan. the US-China trade war has greatly influenced the value of Bitcoin and other cryptocurrencies like the recent RMB declines over trade tensions which have been closely matched by increases in the value of Bitcoin.
In the same context, eToro analyst, Mati Greenspan, said that this financial and global climate is affecting the cryptocurrencies, he explicitly stated :
My understanding is that central bank policy is the biggest driver of all markets, including crypto.