Bitcoin has rebounded from weeks’ weakness with a gain of over $1,300 since Monday August 5, and it continues the upward trend. Almost at the same time on the morning of August 5, the Chinese yuan broke below a psychological 7 to the U.S. dollar, an 11-year low. The movement of the two, many argued, is strongly relevant.

After a decade of a steady appreciation against the US dollar, investors had become accustomed to the stability and growing strength of the yuan. Thus, the unexpected drop – which amounted to 4% over the subsequent two days – rattled Chinese.

Fearful of further yuan depreciation and negative investment environments if the United States and China remain deadlocked in the deepening dispute, many Chinese investors are rushing into safe havens like gold and bitcoin, both of which have spiked in the day and today.

Since the beginning of this year, due to multiple factors such as the escalation of economic and trade disputes and the expected downward adjustment of the global economic growth rate, global capital market volatility has intensified. Under such a context, Bitcoin has come into most investors’ eye as a safe-haven asset.

Chinese investors have great enthusiasm in bitcoin as data shows Chinese Yuan is among top entry fiat currencies into the crypto space with $134.5 million worth of Chinese yuan pouring into bitcoin in the last 24 hours. The country’s demand for cryptocurrencies seems to have been further stimulated as the U.S. President Donald Trump continues to threaten the country with a slew of new tariffs, first on $250 billion worth of Chinese goods in April and the latest 10% tariffs on $300 billion of Chinese imports.

This June when protests were raged in Hong Kong against a controversial extradition bill, Hong Kong residents were paying a premium for Bitcoin; some Hong Kong tycoons have been reportedly moving their assets into bitcoin and offshore amid the political turmoil.

Apart from the ongoing unrest in Hong Kong, the country has recently suspended the issuance of permits for Chinese individual tourists to visit Taiwan because of the poor state of cross-strait relation ahead of a divisive presidential election on the island.

Under such contexts, it is reasonable for Chinese investors to invest in Bitcoin or gold as a hedge against volatile macro moves, though bitcoin price is volatile itself. While after nearly 10 years of evolvement, bitcoin has been known and adopted by more people. Since this year, the value of bitcoin has started to be recognized by institutions and venture capitals who believe in its huge potential, and thus it naturally becomes the safe haven asset of their first choice.