Circle CEO Jeremy Allaire was on CNBC earlier today talking about the Bitcoin rising in price overnight. Part of the reason he explained was due to the capital flight out of China. Chinese Yuan sold off overnight as result of Chinese government manipulating their own currency to offset the trade war tariffs.
Bitcoin price could also be propped up as a flight to safety trade considering the volatility in the equities market in recent weeks. For funds that need a “safe haven” to deploy their capital and find the equities markets too risky in the current environment may choose to park their money in Bitcoin in the short term.
Check out clip from CNBC below, we’re also including the transcript in case you can’t see the video. All rights belong to CNBC and please refer all credits to CNBC.
Nowt to discuss. The crypto currency market is Circle CEO Jeremy Lair. It’s great to see you, Jeremy, this morning. Specifically, let’s start with the devaluation of one. And how much of that do you think is driving the price of Bitcoin right now?
I think very clearly thie overnight moves and what we’ve sort of just, you know, we’re seeing right in front of us right now. 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, obviously are supportive of a non sovereign, highly secure digital store of value. And that’s clearly been fundamental thesis here for Bitcoin and continues to play out. And it looks like we’ll continue.
Let me ask you this. How much of it do you think it’s actually capital flight out of China versus,
people in other countries, thinking that it should be capital flight out of China? The reason I say this is because my understanding is actually very difficult to buy Bitcoin in China,
well, so it’s clearly, you know, the markets are our global all around the world, and a,
very, very significant amount of the market activity is in Asia. There are many very large offshore exchanges, in fact, with their fundamental headquarters in places like Beijing and Shanghai, but with the venues themselves, in Singapore or in other other jurisdictions. So there’s a lot of Chinese national participation in this market through these offshore platforms. One thing to note, though, which is really important, is we have been seeing released, from my vantage point, a softening in the Chinese stance towards crypto. And we’re seeing that in a few ways we’re seeing,
you know, for example, recently, a major Chinese court, you know, defended that Bitcoin is in fact legal property in China, which is significant. We’ve seen the one of the very largest commercial banks, Bank of China, start to do proactive information marketing about the benefits of Bitcoin, the risk of Bitcoin, but more broadly its role.
in the world and then one of the largest companies in the crypt of space in China. Coby, that I believe is domiciled in Singapore. But significant operations in China recently added a party committee, Teo the firm, suggesting that it may be getting more alignment with the Chinese central government.
So what point Jeremy, would you say that Bitcoin is acting like a safe haven trade?
I mean, it sounds almost crazy, right to say Bitcoin is any sort of safe haven. But what we’re seeing in terms of the, you know, the lack of correlation on the correlation Mohr to global turmoil. To that extent, it seems like it could be one.
Yeah. I mean, if you step back and you think about it, you know,
humanity has now created a non sovereign, highly secure,
you know, mechanism to store value that can exist anywhere that the Internet exists. It can exist, you know, as we say in a brand wallet. It’s It’s uncensored, Herbal. It’s unseasonable. These were really powerful attributes that I think as a spy, You know, people who are looking at risk assets, they’re looking at.
It could be a very attractive asset in that context.
Jimmy Thie. Other question, though, is you know, you just talked about China. I know you think there’s a move toward search, maybe making it more allowable, but most this is happening offshore.
I guess it goes back to the question we’ve been asking for quite some time. Which is, Do you believe that regulators across the board, the G seven are going to ultimately step in on a Bitcoin or not? And I’m thinking of what’s happening with Libera, which would be the corollary.
Well, so we’re definitely seeing significantly heightened regulator and policymaker interest in the space.
That is primarily a response to Facebook preparing to launch a global currency.
that’s obviously also response. Adjust to the maturation of the markets, the growth of this infrastructure. It sort of. It’s here to stay.
There are a lot of regulations in different places. They’re not normalised, say across the G twenty.
But I think you know what you’re hearing is,
clearly there need to be rules around, you know, intermediaries that deal with this stuff security, consumer protections. You know, the kind of rules need to be there on DH. That’s very much the case with respect. But,
given the decentralised nature of what Bitcoin ultimately is, can you ever create enough rules to satisfy regulators? Right, that that’s the issue And it’s why I always thought for example, Lieber and I know lots of people have questions and issues about Lieber and Facebook and all of this, but ultimately there’s still somebody to call right. There’s a centralised system where you go call them and say, Guys, we need you to do it this way. Whereas in the case of Bitcoin, the best you can probably do is deal with the on ramps and how the money is managed.
Yeah, I mean, if you treat assets like Bitcoin or affect assets like a theory amore ether as digital commodities, these these air digital commodities that exist,
there, maybe there will be rules around, you know, the intermediaries that handle them. But the fact that they exist in digital commodities is sort of fact. I think you know, The other big struggle here for governments is we’re now entering a world where sovereigns and non state actors are able to launch digital currencies that instantly have the reach of the Internet. And so you know, for example, China in this discussion that we’re having about,
trade, conflict and currency wars and the like. China is mobilising to launch a global digital currency based on R and B leveraging some of the distribution power that they have with major Internet and tech enterprises, in part as a response to liberal. But I think also very much part of its,
you know, global strategy to expand the footprint of how out trading counterparties and businesses and even consumers globally interact with China. And so China is way out ahead on this. I think the US is falling behind.