Bitcoin Remains Stable as South African Rand Depreciates

The world economy is still reeling from the turmoil in the Chinese market, which is in a state of disarray, and Chinese investors are looking for ways to liquidate their assets at an alarming rate. Due to this panic, other currencies have also been affected, as it all comes down to finding a liquid market. The South African Rand (Namibia's currency unit) has also suffered from this shock, and its exchange rate against the US dollar has dropped a lot. On the other hand, Bitcoin has remained stable.

Rand weakens as China market turmoil

Like all fiat currencies in the world, the value of the South African Rand is directly pegged to the U.S. dollar. For other currencies, the U.S. dollar is the main trading currency, which is always a certain liquid market that traders should look for.

When it comes to trading liquidity, the Chinese market may not be able to provide it anytime soon. As early as last week, the stock market was closed twice, and the RMB is likely to depreciate further, and it is quite difficult to get rid of these assets at current prices. Investors and traders have to sell some other assets to make up for these losses.

By chasing the South African rand, investors’ active participation in the trading ecosystem has exposed another Achilles’ heel of our financial world: the ability of a currency to drop by as much as 10% in value in an instant. Not because the rand is a weak currency, but simply because one group of investors decided to sell their holdings in favor of the dollar.

In fact, Japanese investors appear to be largely responsible for this trend, as they have to convert rands into dollars and then into yen. Regardless of who is responsible, a 10% devaluation overnight does not bode well for the South African economy.

Despite the global fiat currency downturn, Bitcoin has remained stable

These days, few will be surprised by the news that the fiat currency crisis is affecting the price of Bitcoin. Although the price chart showed a slight downward trend in the morning, the price of the popular digital currency remained firmly stable around $440.

Slowly but surely, investors are beginning to see the actual value of Bitcoin and no longer view things from a speculative perspective. Bitcoin has proven to be more stable than any subsequent currency, and this trend will continue in the future.