Bitcoin has a sort of charm as a safe haven amid economic uncertainties arising from the lingering US-China trade war. At least, this is an assessment many analysts agree on, as BeInCrypto has previously touched on.
On that count, the most popular cryptocurrency in the world is likely to make further gains from this economic conflict if a recent forecast by Senator Rick Scott of Florida comes true.
Appearing on CNBC’s Squawk Box this Tuesday, Sen. Scott, who has previously served as the 45th governor of Florida, said that a resolution to the US-China trade war is unlikely to come anytime in the foreseeable future.
No Trade Deal
Scott, widely recognized as a key ally of President Trump, has been a vocal critic of China’s socio-economic policies for a while now. The Florida politician has, on numerous occasions, trashed China publicly on issues surrounding its questionable human rights records and blatant disregard for international trade laws.
In his recent conversation with CNBC’s Rebecca Quick, Scott candidly prophesized that a trade deal between the US and China is not going to happen.
Suggesting that China has a dubious record of backing out of important deals unexpectedly, Scott alleged that the second-largest economy in the world is run by a “government that doesn’t comply with anything.”
“For me, this is way bigger than a trade deal. This is a communist Chinese government that doesn’t comply with anything,” says @SenRickScott. “I don’t believe there’s ever going to be a deal.” pic.twitter.com/3JGW3OmK9F
— Squawk Box (@SquawkCNBC) October 22, 2019
Not stopping there, the Senator also argued that given the way China is handling the ongoing Hong Kong crisis, the communist regime shouldn’t be allowed to host the 2022 Winter Olympics.
For Bitcoin, No Trade Deal Is a Good Deal
While not set in stone, the convention is that whenever yuan falls, Bitcoin goes on a rally.
This negative correlation between the Chinese fiat and the world’s largest cryptocurrency (by market cap) has stood the taste of time for the better part of the last year.
The most plausible explanation behind this inverse relationship is that an increasing number of Chinese investors are using Bitcoin as a hedge as the yuan weakens as a direct consequence of the Chinese economy slowing down. The trade war with the US is only expediting the process.
If both countries fail to find a middle ground, as Sen. Scott predicts, it is likely that the yuan will further fall, giving Bitcoin more room to grow.
Worth noting here is that Mark Yusko, founder, and CEO of Morgan Creek Capital Management, shares a similar view as Sen. Scott. In fact, Yusko had made a similar prediction weeks ago by saying a US-China trade deal was very unlikely given that the Chinese government’s apparent reluctance to climb down.
As for Bitcoin’s value as an alternative investment vehicle, Yusko stated that the asset has been steadily on the rise each year, and the daily prices are of no strategic consequences. He also pointed out that Bitcoin’s market cap is always growing, and so are its yearly lows — a sentiment shared by analysts such as Thomas Lee, as BeInCrypto has reported earlier.
— CNBC’s Fast Money (@CNBCFastMoney) September 26, 2019
Do you think a no-deal between the US and China could pave the way for the next bull run for the asset class? Share your thoughts in the comments below.
Images are courtesy of Shutterstock, Twitter.
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