At the beginning of the week Bitcoin started with a price of $430 and remained around this level until the 7th January.

On this day, the PBOC sharply devaluated the Yuan to 6.5446 to the US Dollar. This is the lowest price since 2011. Moreover, the People's Bank announced a reduction in foreign currency reserves of 108 billion US Dollars in December 2015 and 513 billion Dollars during the whole 2015. Also, in the third quarter of 2015 China's GDP declined by 0.1% relative to the first and second quarters of 2015. This factor indicates the weakness of the Chinese economy. The market's reaction was instantaneous, stock exchanges in Shanghai and Shenzhen have faced a sharp drop in their key indices and the value of shares. The Shanghai Composite Index dropped by 6.85%. As a result, trading on the stock exchanges has been stopped.

At the same time the fall in share prices on Chinese stock exchanges led a sharp decline in European and American stock exchanges. For example, NASDAQ has lost 3.03%, Dow Jones fell 2.32%, and the S&P 500 lost 4.9%. And it is still the beginning of the year!

But because of such a situation on the worlds markets, Bitcoin’s price was pushed to increase to $455. However, it is too early to speak about the beginning of an uptrend. Rather, it is the pulse for growth of Bitcoin price. Because by the beginning of the American session on the January 8 Bitcoin began to decline to $443. Then there was a rebound to $450 and then a decline to $446.

Stock market turmoil earlier this year spoke of the threat of a recurrence of the global crisis. But this time the crisis has come to us from China. China is now probably the largest manufacturer. And consumer as well. The economy of this country is closely connected with the world economy. But lately we receive the only negative economic news from China. And it is immediately reflected in those countries with which China has established economic ties. For example, United States. Now with the decline in GDP, the devaluation of the Yuan and the fall of the Shanghai Composite Index, we see the example of NASDAQ, Dow Jones, S&P 500 drops as well. But China is a business partner not only of the US but alse with many of the other leading countries of the world.

Whether in this case, Bitcoin becomes a safe investment? I think yes. The economic crisis has led to the devaluation of national currencies. As we are now seeing with the Yuan. Investors will be looking for ways to proctect theirs savings. Bitcoin is independent from the global economy. It has its own rules. Thus, Bitcoin may become a safe haven. What do you think?

Weekly bitcoin price chart

This analysis and forecast are the personal opinions of the author and are not a recommendation to buy or sell Bitcoins.