Harpal Sandhu, chairman of Mint Exchange, said the market flow that he is seeing through his crypto exchange indicates that investors in China have been selling yuan to move into bitcoin and other currencies ahead of a trade war.
“This is capital flight coming out of China because of trade,” he said in an interview on Monday. Chinese investors were wise to move out of the currency, which has lost value against both the dollar and the yen over the past day. Some analysts expect China to devalue the yuan more aggressively if the trade war escalates, to make exports relatively cheaper.
Mint Exchange is a cryptocurrency clearinghouse that gives traders access to over-the-counter exchanges around the world. Because the order flow is sourced from so many exchanges, Sandhu said he sees where the volume is heaviest. And in the past couple of weeks, “it is happening during Asian trading hours,” he said.
Daily crypto volume on Mint Exchange has tripled in the past 2 weeks, to $59 million on Sunday, he said. The selling has been so intense that several major exchanges have had temporary outages, he added. “These guys can’t handle the volume,” he said. Sandhu said the exchange problems indicate that there are many small trades (as opposed to a few sellers trying to move large chunks of currency). “Our read is that this largely retail driven,” he said.
The price jump has brought some new energy to a field that had lost some of its former oomph as the price of bitcoin and other digital coins has dropped since the start of 2018. The industry’s big annual Consensus conference in New York, put on by crypto news and information site CoinDesk, drew about 4,500 people this year, down from 8,500 last year. Other conferences have shown larger drops. “I went to conferences in Yokohama, Japan, and Bangkok that were supposed to have thousands of attendees, but hundreds showed up,” said Anthony Lojac, an investor attending the Consensus conference. “The price has been affecting people.”
Some large institutional projects have been slow to take off. A crypto platform called Bakkt developed by Intercontinental Exchange (ticker: ICE) that has been building a new bitcoin futures product announced on Monday that the debut would occur “in the coming months,” an uncertain deadline for a project that was expected to propel the industry in 2019.