The price of bitcoin surged nearly 20% during the week ending 3rd June, rising to its highest point in 20 months. But what was the cause of the increase?
Mainstream media sources have largely attributed this sharp increase to demand from the Chinese market, prompted by yuan devaluation. But not everyone agreed with this explanation, as some market experts asserted that the rally was tied to other developments both within and outside of the digital currency ecosystem.
Xu Qing, a spokesperson for Huobi, painted a different picture. Though Qing represents one of the largest bitcoin exchanges by volume, accounting for 41.91% of this week’s trades, he saw the movement as part of a broader series of stresses on the Chinese financial markets.
Qing told CoinDesk:
“The devaluation of RMB has some influence [on bitcoin’s recent rally]. [But] the domestic stock market has been weak since last September. A convenient alternative investment like bitcoin is easy to be accepted by the traders.”
Still, other market observers were quick to stress that this was the predominant factor.
Arthur Hayes, co-founder and CEO of BitMEX, voiced support for the idea that concerns about yuan devaluation