Bitcoin is trading at a discount in China suggesting that it is not used as safe haven by the Chinese

Quick Take

  • Regardless of what you might hear, Bitcoin has historically not been negatively correlated to the stock market
  • There is evidence that the Chinese investors that are directly affected by last week’s CNY devaluation, are not the ones buying bitcoin
  • Investors can currently buy Bitcoin and Tether for about a 1% discount in China.

China allowed its currency to weaken by more than 2% last Monday; letting it fall to its lowest point since March 2008. Chinese state-owned companies also suspended imports of U.S. agricultural products. The trade tensions continued to escalate as President Trump’s Treasury Department formally labeled China a currency manipulator.

Following the turmoil, yields on Treasuries fell to 3-year lows as investors flocked to safety.