China, trade war could lead to Bitcoin replacing gold posits ADVFN’s Chambers
Behind the recent bitcoin rally is not FOMO (fear of missing out) but China’s investors in the run up to a trade war hedging currency devaluation posits Clem Chambers, CEO of ADVFN.
Chambers, the author of Trading Cryptocurrencies: A Beginner’s Guide, writing in Forbes on Tuesday put forth his opinion about bitcoin’s most recent display of exuberance and declared that: “Crypto, and right now bitcoin especially, is the new gold”.
Why? It’s cryptocurrencies’ properties that, like gold, are drawing investors. Whereas people like gold as an asset because it retained value even in times of uncertainty, bitcoin is becoming an equal alternative with its ability to store value, according to Chambers.
He pushes his theory that the bitcoin rally that began on 17 July that may have seemed like a classic bear market rally is more likely a result of “Chinese insiders stuffed billions of RNB into BTC before the pace of devaluation upped its tempo on the 19th. That repricing is holding because China will devalue more as a counter-move to the trade war.”
Dislodging Gold’s niche
In days of yore, the ability to get gold and hold would have been a lot easier than it is currently for investors, thus its use as a hedge against currency devaluation instead of cold, hard cash. However, Chambers points out that crypto can dislodge gold as a niches because while it would be both difficult to buy much physical gold in a short space of time and to hold it, in minutes he could “be up to my ears in crypto and the day after a devaluation I’d be able to seamlessly and almost invisible flip back into fiat almost where I pleased.”
An attraction that Chambers hypothesize could have led Chinese insiders in response to imminent currency devaluation pour Chinese yuan into bitcoin. A spot of insider trading then is what Chambers contends is pushing bitcoin’s rally as the rich and powerful move to an alternative that allows for a swifter more secure way of swapping currency.
Whether or not a trade war ensues with China says Chambers will determine if a bitcoin bear market is over or stays in place. “We are going to have to see if a new trend forms before we know which path we are on, but if the bear market trend is left behind, the next crypto-boom will be on its way. Bitcoin will then take over gold’s primacy as the place to stash money for times when the wheels come off global stability,” he concludes.