Bitcoin prices surged higher late last week ahead of the G20 Summit held in Hangzhou amid growing fears that Chinese policymakers will once again devalue the Yuan to maintain economic activity. Now that the Summit has concluded, the major takeaway from the comments of leaders of major world powers was the emphasis on reducing trade protectionism and doing more to offset the weakness of the global economy.
Growing trade restrictions were one of the focal points of the communique that followed the Summit, with China calling for trading partners to reduce trade protectionism while failing to address its own lopsided policies. However, the comments about more tepid growth must be interpreted as a hint that more aggressive measures will be taken to protect vital interests, namely that further devaluation awaits the Yuan which will likely stoke increased Bitcoin buying pressure.
Bitcoin as a Proxy For Outflows
China has been contending with a slowing pace of growth over the last two years as efforts to spur economic activity with a combination of fiscal and monetary stimulus have largely fallen flat of expectations. With growth tapering to 6.70% on an annualized basis, inflation falling well below target to 1.80%, and bad debts mounting,