In recent times, the quest for bitcoin in China has been on a steady increase due to the continuous devaluation of the country’s currency – Renminbi, reported Bitcoin Magazine. Just last month, The Wall Street Journal presented a story on increasing rate at which Chinese investors were purchasing bitcoin due to the strong market trend which was easily recognized by the financial press.
As part of efforts to secure safe digital refuge for their funds, many Chinese investors are switching over to bitcoin thereby helping one of the country’s leading exchanges surpass two-year highs. Reaching an average limit of 5497 RMB at 1:56 p.m in China, bitcoin prices made remarkable great leaps. This rapid increase in Bitcoin price which was recorded on December 2 has never been experienced since January 2014.
In view of the current upward price trend, some leading Bitcoin operators, and CEOs in China were contacted by Bitcoin Magazine to take the pulse of the market.
BTCC CEO Bobby Lee revealed that the current price rally with bitcoin presents a really exciting trend. Despite the devaluation of the Yuan, China has been experiencing record trading volumes. According to him, “bitcoin’s price might reach or surpass $1,500 as soon as early 2017 thereby surpassing its 2013 all-time high.”
Lee thinks that the 80 percent price rise in bitcoin experienced this year is not only due to the devaluation of the Chinese currency but may have also been influenced by some major global economic and political upheavals, including the recent introduction of rigorous capital controls in Venezuela, the cancellation of banking notes with larger denomination in India, instability in the banking sector, Trump’s election, and even Brexit.
In comparison with altcoins, he thinks bitcoin has risen to become a safe choice for investors due to its relative stability and improvements in recent times – such as the establishment of SegWit. Lee concluded by saying that even before the next block reward halving in 2020, “bitcoin might even reach $10,000 and several thousands of U.S dollars in the long term.”
Considering how government has been spreading the supply of fiat currencies via some quantitative easing solutions, including fiat currencies, this prediction could be actually true. Since units of inflating currencies are used to measure bitcoin price, the price of the cryptocurrency is sure to go up because, over time, money supply will greatly increase.
But CEO Arthur Hayes, says the People’s Bank of China (PBOC) allowed the CNY to weaken since the Trump election. Also, one of the most relevant channels of capital flight, offshore mergers and acquisitions (M&A) of Beijing was closed during the recent period of devaluation. Now, Chinese companies must seek government approval before acquiring overseas firms.
Hayes who is also the Co-Founder of BitMEX revealed that it is becoming increasingly difficult to escape the weakening CNY especially “for regular comrades” many of whom tried to escape the commodity markets after property became unaffordable along with the crash of the stock market. There has been a fall in the trading volumes of most commodity futures due to increased margin requirements and Beijing’s reluctance on this rampant speculation.
Hayes concluded by saying if there is any market where the Chinese people are good at speculating 24/7, it is Bitcoin. As a hedge against a weakening domestic currency, this is where some wealth can be gainfully converted into bitcoin. No wonder the virtual currency is currently experiencing 2-year highs trade in China.
No doubt the use of bitcoin in many emerging markets, including China is on a rapid increase. Even with the speculative nature of most Chinese users, yet it does not seem to affect the increasing number of actual users in any way. BitKan CEO Leon Liu believes that why many startups are beginning to turn their eyes on bitcoin is due to the recently decreasing blockchain hype. “We are bullish on the bitcoin price, based on the statistics obtained,” said Liu.