Bitcoin price made significant gains in a trading hour today as price spiked up to nearly $740 on the Bitstamp Price Index (BPI), pushing toward the higher ceilings of the cryptocurrency in 2016.
The surge began at 12:25 UTC, when bitcoin was trading at $714.88. Merely fifteen minutes later, price jumped to $721.36 before a frenetic surge saw price scale up to $739.01 at 12:55, representing a 4% swell in a half-hour period.
At the time of publishing, Bitcoin was trading at $730.46.
The popular theory for bitcoin’s rising value is, as has been the case in recent times, Chinese investors flocking to the cryptocurrency as a store of value as the yuan weakens further. The Chinese Yuan has continued its plummet, sinking to a new eight-year low as the People’s Bank of China, China’s central bank, cut the reference rate again, for the ninth consecutive trading day.
As the South China Morning Post notes, China’s fiat currency has “dropped more steeply since the unexpected US presidential election victory of Donald Trump”, who has repeatedly accused China of deliberately devaluing the yuan as a means to facilitate its exports in making them more competitive in the global market.
Speaking with Bloomberg, Harrison Hu, a China-centric economist at Royal Bank of Scotland Group Plc in Singapore opined that the yuan could face further hurdles in the coming years of a Trump administration.
The pressure for the yuan to decline could be stronger next year as Trump’s policies could lead to a dollar rally and amid concerns about China-U.S. trade relations.
Capital outflows from China saw a record $44.7 billion leave the country in September in yuan payments as Chinese officials reportedly scramble to impose curbing controls to limit transactions that facilitate funds leaving the country with bitcoin. China is also home to a significant majority of the world’s bitcoin trading, adding weight to the theory that the freefalling yuan is resulting in investors turning to bitcoin.
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All time references are in Coordinated Universal Time (UTC).
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Last modified: June 14, 2020 9:33 AM UTC