Donald Trump’s plan to hit China with tariffs could be great for Bitcoin.
The president-elect has promised sky-high tariffs on Chinese imports, and the world’s second biggest economy is feeling the pressure.
The yuan hit a 16-month low on Monday. Experts say the Chinese currency will devalue even more in the coming months. Bitcoin will benefit, says David Brickell, head of international distribution at FRNT Financial.
“When China devalued in 2015, Bitcoin promptly traded over three times higher,” he told DL News.
His argument? That the slipping yuan will accelerate capital outflows from China.
“Bitcoin will be an obvious destination for some of those flows, especially with capital controls in place making it difficult to get capital out of China via traditional channels,” Brickell said.
The Trump effect
Other crypto watchers expect Trump’s presidency to be bullish for cryptocurrencies.
Bernstein and Standard Chartered analysts say it will help catapult Bitcoin to $200,000 by the end of 2025. Elsewhere, 10x Research estimates that the leading crypto will surge to $120,000 by Trump’s inauguration on January 20.
They have reason to be optimistic. The president-elect made several pro-crypto pledges during the campaign and has made several pro-crypto nominations for key spots, including Paul Atkins for chair of the Securities and Exchange Commission, and David Sacks as AI and crypto czar.
China’s woes
The threat of Trump’s tariffs is the latest headache for Beijing.
Slow growth and a lasting downturn in the property market have long hobbled the Chinese economy. In September, the government revealed plans to distribute $284 billion to stimulate economic growth in September — it’s the biggest stimulus package since the pandemic.
This week, Chinese regulators sought to reassure international investors as the renminbi fell to a record low, the Financial Times reported.
Eric Johanson is DL News’ News Editor. Got a tip? Email at eric@dlnews.com.
