China Yuan’s Depreciation Fuels Bitcoin Price
The price of Bitcoin seems to be climbing again. According to CoinMarketCap, the price of the top digital currency jumped from a rate of $618 earlier on Tuesday October 11 to $633 in three hours at a +2.5% difference. The rise may have to do with the China's yuan fall to its lowest level in six years early Monday October 10 before erasing the losses on the first day of trading after a week-long holiday. Some China watchers have wondered if any signs of yuan weakness following the holiday would signal that Beijing was putting the currency back on a slow depreciation path after holding it....
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China has tried to depreciate the yuan in a controlled manner, but, increasingly, this is becoming more and more difficult to maintain. Investors and businessmen, knowing this, have placed bearish bets on the yuan or converted yuans into dollars, which hastens the decline of the second largest economy’s currency. China has pushed a weaker yuan since it entered into the International Monetary Fund’s group of reserve currencies in early October. The yuan’s decline increased when Donald Trump won the U.S. presidential election. That victory hastened the US dollar’s year of gains.....
The connection between the Chinese yuan and the price of bitcoin appears to be weakening. Despite assertions that macroeconomic fears in China are one factor boosting the price of bitcoin, the nation's recent decision to lower the yuan’s currency peg by the largest amount since August notably failed to cause a significant change in the digital currency’s price this week. Arguably almost entirely driven by long-term bullishness and sentiment, it's become a passtime of bitcoin industry observers to attempt to correlate movements in the market with larger, macroeconomic trends, and China has....
The China Money Network released a “special commentary” which says Yuan fell “slightly lower than the end of December last year, but the rate of change is not large,” according to a google translation. Zooming out of Yuan’s charts, the currency has fallen to its lowest level in seven years. Moreover, China’s reserves have fallen below the significant psychological threshold of $3 trillion, its lowest in five years, raising questions on whether the People’s Bank of China (PBOC), China’s central bank, can continue maintaining Yuan’s value – which fell yesterday. Nonetheless, PBOC’s Weibo....
Bitcoin has had one of its best weeks since August 2014, peaking US$500 per bitcoin on November 5, reaching a new yearly high and attracting the interest of high profile Chinese investors and well-established financial institutions. However, the bitcoin price quickly depreciated as it surpassed US$500 in most Chinese exchanges including Huobi and BTC China, falling back to the US$380 zone and sustaining itself ever since. interestingly, prominent bitcoin startup, exchanges and financial experts are unable to pinpoint the exact reasons to both the surge and depreciation of the bitcoin....
The PBOC's move to control yuan may further strengthen Bitcoin while the country's economy weakens. Bitcoin recently ended its price rally rather abruptly after the Chinese yuan improved its performance for a short period. While many resorted to panic selling with the hopes of yuan’s continued improvements, it hasn’t turned quite the way they had expected. Thanks to the meddling of People’s Bank of China, the currency’s gains were short-lived. According to various financial media outlets, the actions of PBOC to set the yuan midpoint at 6.9262 as against the previous week’s 6.8668 is an....