Bitcoin Price Rolls Past $650 to New Highs Since Bitfinex Hack

October 26, 2016 TK 0 Comments Bitcoin, cryptocurrency, PRICE

Bitcoin price has made increasing gains since the beginning of October, scaling back to the ceiling achieved toward the end of July, prior to the Bitfinex hack that sent prices crashing after a theft of approximately $72 million USD in bitcoin at the time.

At the time of publishing, the Coinbase price chart shows bitcoin trading at $664.68. The number is easily indicative of a 3-month high, for the cryptocurrency.

As has been the trend in recent times, market speculators point to the devaluation of the Chinese Yuan as the driving factor for Chinese investors to choose bitcoin, instead of a stagnating and falling fiat currency. Furthermore, bitcoin’s core characteristic as an unregulated currency sees it avoid strict Chinese capital controls over Chinese yuan moved offshore for external investments. Altogether, bitcoin makes for an attractive option for everyday Chinese investors.

In an interview with Bloomberg, Zhu Jiawei, COO at prominent Chinese bitcoin exchange Huobi stated:

As the yuan enters a path of depreciation, investors will consider investing in assets that can preserve value and hedge risks.

Earlier this month, bitcoin price surged to a 10-week high on October 11 after Chinese buyers driving demand for stockpiling the cryptocurrency. The yuan fell to its lowest level in six years, driving investors to flock toward bitcoin.

China’s massive manufacturing economy has not seen the explosive growth it used to and the country’s economy, as a whole, has stagnated these past few years.

For instance, late 2015 saw the Chinese Central Bank slash its lending and deposit rates, while lowering the mandatory minimum ceiling for banks’ liquid cash reserves in an effort to kickstart a stagnating economy. The decision by the central bank was in the light of China’s growth slipping to 6.9% in Q3 2015, below the 7 percent mandatory growth minimum set by the government.

2016 got off to a bad start as well, as Chinese shares experienced their worst ever start to a year after stock markets plunged 7% in this year’s opening session. The start was enough to see the Chinese securities regulator put the brakes on the market, shutting down trading to prevent further losses and the ensuing volatility.

The trend of Chinese investors migrating to bitcoin will see the cryptocurrency make further gains, according to Arthuer Hayes, Hong Kong-based founder of bitcoin exchange BitMEX. Speaking to Bloomberg, he opined: