The Bitcoin rally continues, with the largest cap asset now trading above $12k and the futures curve moving into deeper contango, as crypto market participants continue to react to the recent developments in the FX market. Notably, the Chinese Renminbi weakened beyond 7 per US dollar for the first time since the 2008 global financial crisis, breaching a level that Chinas central bank (PBOC) has previously defended as the prospects of a trade deal between the US and China have continued to fade away. Unexpectedly though, the PBOC on Tuesday set daily currency fixing stronger than analysts expected and announced the planned sale of yuan-denominated bonds in Hong Kong. This comes directly after the U.S. labelled the country a currency manipulator, which helped drive the yuan up 0.2% a day after it sank to its lowest point since 2015. The central bank also rejected the accusation it manipulates the yuan. In times of distress, cash is king, and, while the focus may be on Bitcoin and other large cap assets in the crypto space, the growing importance of stablecoins will likely again be on display. Maintaining the peg can be just as challenging in times of high velocity inflows as it is during aggressive outflows, and premiums on the likes of KRW and CNH are to be expected. At the same time, Tether (USDT) may gain further ground against other stablecoins, given its preference during capital flight times.