Is your cryptocurrency wallet ready for the full power of the digital Yuan?


Central Bank digital currencies could take months to materialize in the US, the European Union or Japan, however, the People’s Bank of China is eager to get a first-mover advantage here. On Friday, as part of the rapid digitization of the yuan, the PBOC released a bill to turn the digital yuan into legal tender and ban the private sector from issuing cryptocurrencies. The digital Yuan is ready to be released before the 2022 Winter Olympics. Progress is on time as nearly $ 1.3 million in digital Yuan was transferred to test cities from 12 to 18 October.

This move is likely to have a significant impact on the portfolios of several cryptocurrency traders who are all or heavily invested in Bitcoin. This is evident from East Asia’s role in world cryptocurrency markets and its importance to retail traders cannot be undermined.

Is your wallet ready for the full power of the digital Yuan?

Cryptocurrency adoption around the world || Source: Chainalysis

Based on data from Chainalysis, China ranks fourth in the world for cryptocurrency adoption. The full strength of the digital Yuan may be too much to handle for most retail traders’ portfolios, due to the influence of East Asia, more specifically Chinese, on the price of Bitcoin. The impact on price is significant as regional BTC flows originate mainly from East Asia and 56.59% of flows between different regions originate in China.

Is your wallet ready for the full power of the digital Yuan?

Regional Bitcoin Flows || Source: Chainalysis

The launch of the Digital Yuan and its recognition as legal tender, with specially designed wallets would lead to exponential adoption, and the adoption and transfer of Bitcoin within the region is sure to drop, at least 50% compared to to current numbers within the first few quarters. launch.

The latest news on the bill could directly affect the sentiment of miners. China-based mining pools and BTC farms control 66% of the global power of Bitcoin computers. Over the past couple of years, miners have HODLing Bitcoin to raise prices, however, fears of a looming drop could lead to more pressure on the sell side. With the increasing influx of Bitcoin into exchanges and miners selling their Bitcoins, the price could drop close to fair value quite soon. To protect your wallet from this possible drop, forget “Go Big or Go Broke”. Instead, it would be ideal to limit exposure to Bitcoin, based on risk appetite. If more than 10% of your wallet is invested in Bitcoin, reevaluate.

Several crypto influencers are signaling the need for a rebalanced portfolio. Investor and trader Quiten Francois recently tweeted his top 3 holdings in cryptocurrency.

Is your wallet ready for the full power of the digital Yuan?

Source: Twitter

If you have fewer than 10 altcoins in your wallet, it might be time to look at the top 25 altcoins, based on market cap. Altcoins like $ FIL, $ LINK and $ DOT are currently profitable with returns of 10-20% in 1 week. The best Altcoins based on their performance over the past 7 days are ETH 8.17%, LINK 13.41%, LTC 22.89%, FIL 28.9%. Few of the other altcoins in the top 25, based on market cap, are currently posting negative returns and it may be the perfect time to rebalance your wallet before the full strength of the digital Yuan hits Bitcoin.

[ad_2]Source link