Bitcoin has been flirting with the $12,000 level, fluctuating close to this price point for most of the day, as the Chinese yuan hit its lowest in more than a decade against the U.S. dollar.
The digital currency reached an intra-day high of $11,940.48 around 1:00 p.m. EDT, up roughly 9% in 24 hours, before retreating somewhat, according to CoinDesk.
At the time of this writing, the cryptocurrency was trading at $11,772.95, down approximately 1.4% from its intra-day high, CoinDesk data showed.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Chinese Currency Wars
When explaining bitcoin’s latest gains, several analysts pointed to global macroeconomic concerns, particularly the instability surrounding the Chinese yuan.
The yuan surpassed the crucial level of seven per U.S. dollar today, according to Refinitiv data reported on by The Wall Street Journal.
President Trump responded to this development, accusing China of manipulating its currency in a tweet.
He also asked whether the Federal Reserve is “listening.”
Amid all this turmoil, Chinese investors are fleeing the yuan and putting their money into bitcoin, which many view as a kind of safe haven from macroeconomic instability.
‘Flight To Safety’
“It is important to realize that we are in the beginning stage of a flight to safety,” said Charles Thorngren, CEO of Noble Alternative Investments.
“While we can argue if Bitcoin is truly a safe haven at this point, the reality is that currencies are the risk right now,” he stated.
“Assets that move as a counter to currencies are becoming the new Safe haven assets,” claimed Thorngren.
Chris Keshian, a former cryptocurrency hedge fund manager, provided similar input, describing bitcoin as “a hedge against destabilization in global currency markets.”
“As such, any downturn in a major global currency would lead traders to move into bitcoin.”
Bitcoin’s ‘Unique Status’
Akbar Thobhani, CEO and Cofounder of cryptocurrency prime dealer SFOX, also weighed in on how uncertain macroeconomic conditions can serve as a boon to the world’s most prominent digital currency.
“Recent macroeconomic stumbles have coincided with increases in BTC’s price, and we are witnessing that same trend now,” said Thobani.
“While other cryptocurrencies have done well, BTC seems to uniquely enjoy a status as a store of value, similar to gold, which may explain why it is building positive momentum amid 10% tariff announcements, a new 10-year low for the yuan, and bearish global equity markets.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.