Bitcoin prices have hit their highest values in nearly two years, and owners have China to thank.
Spurred by demand in China, the digital currency hit $546.80 on CoinDesk’s Bitcoin Price Index Tuesday, its highest mark since August 2014. The price remained at $540.81 Wednesday on the index, a 21% increase over the last month.
A weakening in the yuan has driven Bitcoin trading volumes on the Shanghai-headquartered digital exchange BTTC to as much as five times their daily average since Friday, BTTC CEO Bobby Lee told Reuters.
“People are worrying about the PBOC (People’s Bank of China) devaluing the yuan,” he said. “If you’re in China and you’re holding onto that yuan, that’s a huge risk, so they’re buying into hard assets … Bitcoin is something that is very easily traded into, so that’s what’s happening.”
Chinese exchanges handle about 95% of all bitcoin trading, according to CoinDesk, so increased trading volumes there have global repercussions.
Values of bitcoin, which aims to replace cash and the traditional financial system with unique codes shared between users, have been volatile as the digital currency has gained attention. In November 2013, bitcoin prices surpassed $1,100, but then plummeted by early 2015 to below $180. However, values recovered to above the $400 mark by year’s end, making it the best-performing currency in 2015.
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