In late last year, Bitcoin surged past the established resistance to rise in value. In the month of August and early September, the digital currency was valued at around $200 plus with minimum volatility. However, thanks to the global economic conditions, bitcoin price picked up. The sudden increase in bitcoin price was attributed to multiple economic reasons.
The bitcoin price rise was inadvertently influenced by the economic slowdown suffered by Greece and China. The reports on US economy also influenced the increase in bitcoin price. Among all these things, the move to devalue Chinese Yuan turned out to be the major driving force behind increased demand for bitcoin. What Drove Bitcoin Demand in China?
With the devaluation of Chinese Yuan, people started looking for ways to move money out of the country to invest in assets that are not at the risk of losing its value. Thanks to strict capital controls, the only easy way to convert or move assets was in the form of bitcoins. This allegedly led to an increased demand for the digital currency, leading to a price surge.
In a brief period, the Chinese bitcoin exchanges registered record traffic and sale of the digital currency. During this time, one of the leading bitcoin platforms in the country, Huobi broke all its previous records by selling a huge volume of bitcoin in a day. While industry experts identified the cause for a sudden increase in demand and predicted the value of bitcoin to grow upwards, conventional economists and armchair finance gurus decided to draw the world’s attention away from the root cause by fabricating a theory.
Why did they do that? Only they can answer. But if we have to speculate, they did not want to accept that the well-established monetary system is in peril and they definitely didn’t […]
