There appears to be a recent growth in Bitcoin and the CEO of Crypto payments firm Circle, Jeremy Allaire, suggests that macroeconomic turmoil is responsible for this growth.
On Aug 5, during an interview with CNBC, Allaire stated that in times of geopolitical and macroeconomic turmoil, bitcoin has become a haven to store wealth and there is a correlation between the recent coins’ gains and the devaluation of the Chinese yuan that just touched its 11-year low. Allaire stated;
“You can very clearly see some macro correlation there. I think the broader theme of, you know, Bitcoin specifically, crypto more broadly participating in these global macro forces is becoming more and more clear. Rising nationalism, rising amounts of currency conflict, trade wars, these all are supportive of a non-sovereign, highly secure digital store of value.”
We know China hardly purchase bitcoin and are not fully convinced about this new digital currency. With this in mind, Allaire was asked whether he believes the growth was caused by an inflow of Chinese capital or just investors trying to capitalize on the anticipation of this inflow, given that Bitcoin is not easily purchasable in China.
Allaire answered that China is a significant participant in the cryptocurrency market through offshore firms and that the government is softening its stance towards Bitcoin.
Backing his statement, he cited how, in July, the Bank of China, one of the four biggest state-owned commercial banks in the country, released an infographic on its website, illustrating what Bitcoin is and how it has been legally recognized as property in the country’s courts.
Finally, Allaire noted that the major cryptocurrency exchange, Huobi has created a Communist Party branch as part of its legal obligations, which indicates that they are developing closer ties with the Chinese state. In China, according to their law, a company with more than three Communist Party member employees must set up its branch.
According to Cointelegraph report in April, Allaire affirmed that the crypto and blockchain industry is a fundamental redesign of the basics of how civic society will ultimately function. At a panel dubbed “Money and Payments in the Digital Age,” Allaire said that blockchain and crypto are more than just payments instruments, but also a fundamentally new system for record-keeping.