Greg Wolfson, Business Development Director of Bitcoin China, said Bitcoin is becoming a safe haven for investment

Since the devaluation of the RMB last week, the exchange rate against the US dollar has hit a four-year low, while the exchange rate of Bitcoin against the RMB has risen from 1633 to 1690.36. Is it the devaluation of the RMB that has triggered the growth of Bitcoin in China?

Not necessarily.

Greg Wolfson, director of business development at BTCChina, told Bitcoin Magazine, “Generally speaking, if Bitcoin is like other commodities, then a depreciation of the RMB will inevitably lead to a drop in the price of Bitcoin. Since Bitcoin is more expensive than the RMB, this will reduce overall market demand, leading to a drop in price. In fact, over the past five years, commodities have experienced a bear market, partly due to structural changes in China. During this period, the price of Bitcoin has also experienced a decline, but it has not shown a correlation with traditional commodity indices.”

However, many people in China are keen on Bitcoin, believing that Bitcoin is more stable than the RMB. Some companies buy Bitcoin mainly because Bitcoin has a higher international exchange rate and can avoid crises during economic uncertainties.

"The devaluation of the yuan is an important policy signal, but the actual devaluation is relatively small," Wolfson said. "However, there is now a growing belief that Bitcoin has the same role that gold has played historically, as a safe haven. If this is true, then China's economic turmoil will trigger investors and companies to buy more Bitcoin as a 'safe haven.' Bitcoin's special properties make it a popular choice during times of economic uncertainty, uncertainty in the Chinese stock market, and uncertainty in exchange rates, and the overall economic situation will create more demand and drive up prices."

Although the depreciation of the RMB has created space for the development of Bitcoin, the negative news about Bitcoin in China has affected the image of Bitcoin. As Bitcoin has been involved in many scams such as MyCoin or Ponzi schemes and has been hacked many times, the image of Bitcoin has been tarnished, and most Chinese people believe that Bitcoin is a tool for illegal transactions and illegal schemes.

“The Chinese are very wary of anything that could be a scam,” Wolfson told Bitcoin Magazine. “Bitcoin’s current unclear legal status and association with hacking, gambling, and online black markets have undermined its legitimacy. We need to do a better job of public relations, helping people understand the purpose of Bitcoin and, most importantly, making it truly commercially useful.”

Wolfson said that in order for Bitcoin to be accepted by the mainstream Chinese public, relevant and effective applications that make sense in China must be developed. Since all of China's payment systems and regulatory regulations are very unique, it is difficult to predict how Bitcoin will develop as a payment method for domestic transactions in China.

However, Wolfson said, “It doesn’t have to be limited to payments for mainstream adoption in China. There is a lot of mining and trading in China right now, so it can be said that Bitcoin is more mainstream in China than anywhere else in the world.”