Bitcoin’s Macro Bull Trend Unaffected by Chinese Investors‘ $50 Billion Tether Exodus
New data from Chainalysis shows that Chinese investors apparently used Tether (USDT) to move almost USD 50 billion abroad. This has led some crypto investors to wonder whether the price of Bitcoin could be affected by the capital flight from China.
Chainalysis researchers said:
„Over the past 12 months, with China’s economy suffering from trade wars and the devaluation of the yuan at different points, we have seen more than USD 50 billion in crypto currencies move from directions in China to directions abroad.
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A large part of the funds moved through Tether and while this was happening the dominant stablecoin saw its market capitalization reach a new all-time high of USD 12 billion on paper.
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China, along with several other Asian countries, has strict capital controls that make it difficult for investors to move large amounts of money abroad.
If Chinese investors moved tens of billions of dollars in Bitcoin (BTC) or Tether just to get capital out of China, there is a chance that a large portion will be sold and converted into cash.
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Chainalysis emphasized that the full $50 billion does not represent a capital flight, but can be considered the absolute high. The researchers said:
„Obviously, not all of this is capital flight, but we can think of USD 50 billion as an absolute maximum for capital flight through cryptosystems from East Asia to other regions“.
The researchers evaluated wallets in China and their transactions to addresses in foreign countries. They found that USD 18 billion in Tether moved from East Asia to other regions.
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But the company pointed out that it is unlikely that it is all a capital flight. As such, it is very difficult to determine what percentage of the funds were moved as a means of getting capital out of China. They explained:
„In total, over $18 billion in Tether was transferred from East Asian directions to those in other regions during the last 12 months. Again, it is highly unlikely that all of this is capital flight.
If this was purely BTC-related capital flight, it would add some selling pressure to Bitcoin. In such a situation, a drop in the BTC price should occur, as these investors will sell their positions in Bitcoin Era in search of USD or other fiat currencies.