Virtual safe haven? Bitcoin surges to highest in more than two years

LONDON, June 16 The price of bitcoin surged 8
percent to $750 on Thursday, its highest since early 2014, as
jittery investors sought shelter in the web-based currency, once
considered too volatile to invest in, let alone at times of
market stress.

Worries that Britain will vote next week to leave the
European Union, as well as concerns over global growth, have
pushed down stocks and oil prices, while low-risk assets such as
gold and top-rated government debt have risen.

Along with those conventional safe havens, investors have
also turned to bitcoin.

The “cryptocurrency”, which can move money across the globe
quickly and anonymously with no need for a central authority,
has climbed almost 70 percent over the past four weeks on the
Luxembourg-based Bitstamp exchange. Gold, by
comparison, has rallied almost 5 percent during the same period.

Daniel Masters, a former commodities trader who runs
Jersey-based bitcoin hedge fund Global Advisors, said he had
started to see commodity trading advisors put bitcoin into their
portfolios “over the past month or two”.

“Bitcoin is a global, frictionless, instantaneous form of
currency, and it has a fixed supply. In this day and age, that
… is becoming very appealing,” Masters said.

Other currencies had been weakened by the huge
money-printing programmes implemented in recent years by central
banks. With the yuan hitting a five-year low on Wednesday
, bitcoin traders said demand from China was also
driving up the cryptocurrency.

“If you’re a Chinese investor … you’re looking at two
things: you want to buy something that has momentum, and you
want to buy something that in the current environment in China,
with a devaluing currency, a shaky stock market, a very shaky
real estate market and a very weak credit market, is truly
uncorrelated,” Masters said.

Around 95 percent of bitcoin trade is via Chinese exchanges,
according to industry website Coindesk, so any increase in
demand from China tends to have a significant impact.

Bitcoin’s lack of central authority makes it attractive to
those wanting to get around capital controls, such as those in

“Although Bitcoin is nascent, it fits the bill as a form of
digital gold and as a route to evade capital controls,” said
Charles Hayter, CEO of London-based digital currency analysis
website CryptoCompare.

Another reason given by bitcoin experts for the currency’s
latest surge is that on July 10, the number of new bitcoins that
are added to the system every day will be halved. That slower
growth in supply should raise the currency’s value.

(Reporting by Jemima Kelly, editing by Larry King)

mm – leading Bitcoin News source since 2012

Virtual currency is not legal tender, is not backed by the government, and accounts and value balances are not subject to consumer protections. The information does not constitute investment advice or an offer to invest.