Digital Currency Group CEO – Heightened US-China Trade Tensions Is Behind BTC Price Rally
Barry Silbert, CEO and founder of the cryptocurrency company Digital Currency Group, claimed that the latest increase in the price of Bitcoin (BTC) could be related to the trade conflict between China and the United States.
On the recent episode of Fortune’s Balancing The Ledger series Silbert noted this trend.
“It’s certainly interesting that the [Bitcoin] price started its acceleration, moving up and to the right, when the trade discussions broke down.”
Founder of the Digital Currency Group, Barry Silbert, observed how the BTC’s uptrend matched with breaking down of discussions between Beijing and Washington.
As US-China trade negotiations collapsed earlier in May, Bitcoin’s value rose greater than it has all year round.
Market observers predicted that the cryptocurrency, frequently referenced to as digital gold,” gained from the nervousness of shareholders in equity and foreign exchange markets sending down shares and the currency of China.
The crypto proponent said Bitcoin proves to be a secure place for investors at moments of turbulence in the international economy— and quoted other instances where the price of BTC increased as conventional inventory prices took a dip.
“If you look at over the past five years — when Brexit happened, Bitcoin went up. When Grexit happened, Bitcoin went up.” Bitcoin boosters like Silbert have repeatedly asserted that in muddy financial conditions, the digital coin could offer security
“I think [Bitcoin is] serving as a bit of a non-correlated asset,” Silbert said, meaning an asset that is insulated from the vagaries of the traditional financial system, as “people always expected Bitcoin would be.”
Silbert asks skeptics to look at the lengthy and emerging track record of Bitcoin in moments of trouble. “If you look at over the past five years—when ‘Brexit,” took place, Bitcoin appreciated. Bitcoin again rose when ‘Grexit’ occurred,” he said.
However, there is no doubt that Bitcoin could do better than other popular assets used for hedging risk. For example, gold has been stockpiled by central banks in recent times, says Silbert, an awkward fact for people claiming the precious metal provides refuge from the erratic fiscal moves of governments.
When things get hard, central banks are forced to first dilute their treasuries and gold holdings, Silbert explains. “It doesn’t mean necessarily that the money will move into Bitcoin, but it just means that you don’t have the forced pressure of people selling the Bitcoin” if world economies slowdown.
The study suits Grayscale Investments, a subsidiary of Silbert’s Digital Currency Group, which launched this month, a domestic, multi-million-dollar publicity campaign. In support of Bitcoin, the TV advertisements encourage customers to “drop gold.” Obviously, purchasing Bitcoin in hopes of global impasses and financial mishaps is not a proven safe strategy.
Considering the volatility encountered by the crypto economies over the previous two years, the ceo argues that cases of BTC prices going down has occurred due to macroeconomic factors The trade conflict between the US and China has seen both superpowers impose tit-for-tat duties on the goods of each other, eventually making daily products more costly for customers.
At the beginning of May, Grayscale Investments, one of the affiliates of the Digital Currency Group, initiated an ad campaign encouraging investors to leave the yellow metal and instead adopt Bitcoin.
Finally, Silbert acknowledged that “Ultimately, given the volatility that exists in Bitcoin, I think there are plenty of examples you can find where [the price] went down when those macro events happened as well.”