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Hello and welcome to Markets Daily hosted

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by me, Jen Sinase. On this show,

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we navigate the currents shaping the crypto

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markets, providing insights against the broader financial

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landscape so whether you're actively investing or

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just fascinated by the volatility that is

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the crypto markets, this show is your

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compass to understanding what's happened, where we

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are, and where we're going. .

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We all want to believe in something.

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In Chinese, belief also means trust.

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We want to trust our systems

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and each other so we can

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build a future beyond what we

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know. Join us at Consensus Hong

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Kong, where belief becomes real. On

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this show, we ask, could Bitcoin's

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price rally be accelerated by China's

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market meltdown? Today's episode is going

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to take a look at an

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article written by Quinn Desk's Amcar

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Gabouli. It's a story of capital

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flight. currency devaluation, and

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how Bitcoin continues to cement itself

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as a global hedge. Let's break

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down what's happening here. To start,

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we have to talk about the

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state of the Chinese markets as

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we step into the new year.

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The Chinese UN has fallen to

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its weakest points in September, 2023,

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trading at 7.32 per US dollar.

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This marks a point 4% drop

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in just the first week of

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2025, extending a three-month losing streak.

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Now, what's causing this slide? Investors

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are bracing for impending US tariffs

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under President-elect Donald Trump's administration, which

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has spooked the markets. Trump, as we

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know, was set to take office on

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January 20th. It's not just the

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currency that's struggling though. The CSI 300

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index which tracks blue chip stocks

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in China has dropped to its

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lowest levels since September. Meanwhile, the

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Chinese index often seen as a

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barometer for high growth innovative companies

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has fallen by 8% in just

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one week and let's not forget

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the bond market. The yield on

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China's 10 year government bonds has

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tumbled to 1.6% a full percentage

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point lower than a year ago.

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Signaling. growing fears of deflation. Now, what

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does this all mean? In one word,

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uncertainty, and uncertainty often leads

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to capital flight. Now, here's

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where Bitcoin comes in. Historically,

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when the Chinese economy shows

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signs of strain, we see

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money flowing into alternative assets.

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Bitcoin is one of those

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assets. The founders of the London

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Crypto Club recently pointed out that

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Bitcoin surged threefold during China's last

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significant devaluation in 2015. They argue

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that as China allows its currency

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to slide, Bitcoin becomes an attractive

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destination for capital escaping the country.

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But here's the twist. The People's

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Bank of China isn't sitting idle.

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While they've avoided outright intervention, such

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as directly selling dollars to prop

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up the UN, they've been using

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like tightening liquidity in the offshore

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UN market in Hong Kong. For

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example, overnight interbank rates for the

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offshore UN recently spiked to 8.1%

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the highest since June 2021. These

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moves are designed to temper bearish

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expectations. That said, Bitcoin bulls need

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to keep an eye out for

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a potential outright intervention involving the

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sale of dollars to prop up

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the UN, as that could boost

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the dollar index, capping the greenback

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denominated nominated assets like. Bitcoin. Speaking

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of the dollar, let's not ignore

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its recent rally. The dollar index

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has climbed from 100 to 108

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in just three months, driven by

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rising US treasury yields. A stronger

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dollar often zaps investor appetite for

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riskier assets like Bitcoin. So

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while the Bitcoin bull run

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has strong momentum, it's not

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immune to macroeconomic forces. Where

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does this leave us? On one

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hand, China's market meltdown and capital

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flight could continue to fuel Bitcoin's

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bullrun. On the other hand, potential

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interventions and a strengthening dollar could

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cap Bitcoin's upside in the near

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term. For Bitcoin investors, this is

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a reminder of just how interconnected

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global markets have become when traditional

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markets markets falter, whether it's in

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China, Europe, or the United States, crypto

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increasingly becomes a part of the conversation.

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Thank you so much for watching Markets

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Daily today. If you want to continue

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