The Chinese government has in 2019 been giving Bitcoin all the ammunition it needs to rally. While Beijing is doing this unconsciously, political and economic struggle in the country has seen Bitcoin’s popularity rise exponentially.
Just after giving the asset a boost during the recent escalated trade war talks, Beijing is once again facing economic trouble that could boost Bitcoin. For the last 11 weeks, there have been protests in Hong Kong against China.
Now the protestants have threatened to cripple the financial system. The more than a million protestants plan to withdraw cash in banks and ATMs to weaken the Yuan.
Weakened Yuan Means A Stronger Bitcoin (BTC)
While the protests are purely political and not economical, the protestants plan to result in crippling the financial system to get the government’s attention. The root of the protests goes back to an extradition bill ordered by Hong Kong chief executive Carrie Lam.
People’s freedom was being attacked and they were not planning to take it sitting down. In the weeks that followed, thousands began taking to the street and soon after, this was millions. In the last protests, this number had risen to around 1.7 million.
With such a big number threatening to cripple the financial system, this could have a real impact. While a significant number will convert their cash into the dollar, which is more popular, another number will seek safe haven in Bitcoin. In the past, we have seen the weakening of the Yuan correlate with Bitcoin spikes. This could easily repeat again.
China Now Staring At A Recession
With the trade war and now Hong Kong protests which have slowed the economy and now threatening the financial system, China could be staring at a recession. According to reports, billionaires are hugely concerned about the restlessness in Hong Kong. These businessmen own much of the land and businesses in Hong Kong and the latest protests have been hurting them big. It has become hard to sell property, operate business and tourism has halted.
China is going to face more intense political and economic challenges in the weeks to come with the Hong Kong protest and U.S trade war. With the Yuan under attack from all sides, there’s only one clear winner, Bitcoin.