Bitcoin Breaks $835 in China, Controls 93 Percent of Trading
The price of Bitcoin surpassed the US$820 mark in the afternoon of December 21, spurring the interests of investors and traders around the world.
The price of Bitcoin surpassed the $820 mark on the afternoon of Dec. 21, spurring the interests of investors and traders around the world.
Experts have laid out some of the reasons that may have led to the surge in price, including the yuan-to-Bitcoin correlation, exposure of bank corruption, increasing demonetization of cash and the restriction on physical assets.
Thriving on economic and political turmoil
For the first time in over two years and ten months, Bitcoin has crossed the $800 mark. Analysts and experts have provided a variety of factors that could have acted as a catalyst for the surge.
In an interview, Charles Hayter, chief executive and founder of digital currency comparison website CryptoCompare, stated:
"The rally is difficult to pin down as there are a number of contributing factors that include the global economic and political shifts underway with (President-elect Donald) Trump and the Eurozone with Bitcoin becoming a digital hedge and flight to safety.”
Capital controls, devaluation of Chinese yuan
Other experts and investors, including Digital Currency CEO Barry Silbert and BTCC COO Samson Mow, agree with Hayter’s statement, in which they hinted that the devaluation of the Chinese yuan and the local government’s increasing capital controls played a vital role in the rising price of Bitcoin.
Amazing correlation https://t.co/eTyhV7ZtHs— Barry Silbert (@barrysilbert) December 20, 2016
Mow also noted that Bitcoin passed the $800 mark for over a week in China, a country that controls approximately 93 percent of the global Bitcoin exchange market. In China, Bitcoin is being traded at around $835 on average, demonstrating the rising demand for Bitcoin.
As Silbert stated on social media, the devaluation of the yuan and the Chinese government’s restrictive regulations on money transmission and outflow of cash spurred the interests of mainstream and high-profile investors in China towards Bitcoin.
The trend in the short-term
With investors and traders already planning a move towards Bitcoin by acquiring the digital currency, several major pieces of information were released to the financial industry this past week, as the chief of the IMF was convicted for fraud and Spanish banks lost their EU case concerning mortgage interest payments.
While it is hard to speculate on the trend of Bitcoin price in the short-term, it is likely that the price is going to rise as it approaches the end of the year. The outflow of cash in places like China will surge amid the new year, which will once again increase the demand for Bitcoin.