The devaluation of China’s currency, currently rattling global financial markets, shows that Bitcoin is now becoming a safe haven asset. That’s the view of Nigel Green, Chief Executive and Founder of deVere Group.
The Chinese renminbi fell to under seven to the US dollar on Monday, the lowest in more than a decade, igniting drops in stocks and emerging market currencies and driving a rally in government bonds. Bitcoin jumped 10% as global stocks were rocked by the devaluation of China’s yuan, the trade war with the US intensifying.
“This is not a coincidence. It reveals that consensus is growing that Bitcoin is becoming a flight-to-safety asset during times of market uncertainty. Bitcoin is currently realising its reputation as a form of digital gold,” Green comments.
“Up to now, gold has been known as the ultimate safe haven asset, but Bitcoin, which shares its key characteristics of being a store of value and scarcity, could potentially dethrone gold in the future as the world becomes increasingly digitalised.”
With the Trump administration now officially labelling China a currency manipulator, Green believes that investors are set to continue to pile in to decentralised, non-sovereign, secure currencies such as Bitcoin to protect them from the turmoil taking place in traditional markets.
“The legitimate risks posed by the continuing trade dispute, China’s currency devaluation and other geopolitical issues, such as Brexit and its far-reaching associated challenges, will lead an increasing number of institutional and retail investors to diversify their portfolios and hedge against those risks by investing in crypto assets,” he says.
“This will drive the price of Bitcoin and other cryptocurrencies higher. Under the current circumstances, I believe the Bitcoin price could hit $15,000 within weeks,” Green concludes.