Bitcoin Rally Stalls, but Sliding Yuan Could Be Bullish Catalyst

Crypto equities have also taken a hit, with bitcoin miner Bitdeer (BTDR) leading the way with a 8.7% loss. Strategy (MSTR) is down 5.3% and Coinbase (COIN) 2.3%. One outlier is DeFi Technologies (DEFTF), which is up 10.27%, potentially due to an expectation from some of its shareholders that the Toronto-based company could soon follow in Galaxy Digital’s (GLXY) footsteps and get listed on the U.S. Nasdaq.

Meanwhile, the S&P 500 and Nasdaq are down 0.5% and 0.7%, respectively — modest losses, but sharply reversed from roughly 4% advances earlier in the session.

The price action happened as the White House announced during the day that 104% additional tariffs on Chinese goods would take effect at midnight on Tuesday. The tariff news put additional pressure on the Chinese currency, with the offshore yuan (CNH) rapidly depreciating against the U.S. dollar during the day to 7.4, its weakest levels in years.

Some have suggested that Beijing could respond to the tariffs by allowing a sizable weakening in the yuan, thus making China's exports more competitive than otherwise. Bitcoin bulls have seized on that idea, noting a devaluation in the yuan would surely lead to capital flight from China, with at least some of that money potentially looking to hide out in bitcoin.