Will The Continued Depreciation of The Renminbi Benefit Bitcoin?

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Since Donald Trump took office, he has spared no effort to attack the whole world with trade practices to gain continuous profits in trades. At the beginning of May, when the US increased the tariff on $200 billion of Chinese goods to 25%, many domestic and foreign institutions, including Goldman Sachs, Morgan Stanley, and Ping An Securities, lowered the short-term forecast of RMB against the US dollar. Recently, the depreciation speed of RMB is a little bit appalling.

The US dollar against the Renminbi touched 6.25 at the lowest level in late March to a current maximum of 6.91. In just two months, the renminbi depreciated by 10.56%. the continuous deprecation of Renminbi caused the large inflow of safe-haven assets like gold, silver, bonds, real estate, and even virtual currency.

Donald Trump Has Been The Biggest Promoter For Bitcoin Recovery

Bitcoin has skyrocketed in the context of escalating trade wars and increasing pressure on the depreciation of the Renminbi. Industry insiders say that Bitcoin is becoming a way of capital flight for Chinese investors, they convert the Renminbi to US dollars or Bitcoin for fearing the depreciation of Renminbi, such behaviors have fueled the Bitcoin price. Since May 1st, Bitcoin has skyrocketed from $5,287 to a high of $9,073 with an increase of 71%.

The escalation of Sino-US trade friction has indeed accelerated the increase of BTC, but it is not the fundamental reason for the overall rise of the digital market. In fact, since the beginning of the year, the digital currency market has shown the bullish trend, and such bullish trend has become more frequent and more obvious from April, in particular, the behaviors of traditional enterprises. Instead of sudden behavior, it is the promotion of the main funds that drove the continuous rise of BTC.

Bull Market is Coming, Hoard Cryptocurrency or Trade Contract?

Through observations on the recent market, whether from the news (Bakkt is about to launch the physical delivery contract, Fidelity and other technology giants confirm to enter the cryptocurrency market), fundamentals (halves and flood season, safe-haven demand), or conspiracy theory (Bitmain sells miners by using market manipulation techniques, New York underground treasury is almost empty), we can infer that Bitcoin has already opened a new round of bull market. Although there have been short-term declines, it does not affect the long-term increasing trend of Bitcoin.

In addition, the World Wealth Report 2018 revealed that 29% of high net worth individuals with investable assets of more than $1 million are interested in cryptocurrency, 26.9% are attracted by the concept of cryptocurrency, potential return, and optimal value reserves. Some experts said that the Bitcoin is advancing to the previous high level, and the value of it is immeasurable with the deep introduction and increasing applications of blockchain.

Therefore, under such a bullish context, conservative investors can hoard digital currencies, while adventurous investors can choose contract trading because they can use the profit to get more profits in the bull market.

58COIN offers another profitable channel for conservative investors — the new launched Cloud Mining service.

Cloud Mining is a service that allows users to lease and enjoy earnings based on each T hashrate or designated period of time accordingly. The mining machines on sale are Antminer S17 series and T17 series, and the current contracts are perpetual ones. Other periodic mining services will hit the market subsequently.

Starting with 1T and sold for 250 RMB, the miners listed on 58COIN has the shortest static payback period of 164 days. Currently, the electricity cost is 0.32 RMB ($0.047)/kWh and the O&M costs is 0.03 RMB/kWh, the lowest in the industry. Cloud mining is the optimal choice for conservative investors for its sustained stability, long-term and considerable earnings.

In summary, exchange rate changes are only a small part of Bitcoin’s safe-haven demand, and political and social stability will also affect Bitcoin’s safe-haven demand. Therefore, there is a weak correlation between Bitcoin price fluctuations and changes in the conversion rate between the US dollar and the RMB. Cryptocurrency investors should develop an automatic investment plan on the popular currencies in spot trading, and invest in continued profitable cloud mining, and trade contracts if needed, of course, all of these investment operations must be done on a reliable platform.

Website: https://www.58ex.com/

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