Bitcoin Surges 10% Versus US Dollar in 24 Hours, as China Eases Capital Export Curbs
Crypto Currency Now Stands at $2800 US Dollars, an all time high
June 26, 2017
There are only 17 million of them. They started out their adoption as currency at a Papa Johns pizza parlor in 2008. Today, they are worth more than $2800 each. And if you have been living somewhere other than cyberspace, they are called Bitcoin or Block Chain.
China has threatened to permanently block the use of the crypto currency, which apparently can be used to circumvent the PRC's limitation on the outflow of capital from China. However, it appears that the Chinese Cyberspace Regulatory Agency will in fact allow the sale and use of Bitcoin, defining it as a commodity.
China Exchanges Resume Allowing Bitcoin Withdrawals, reports the Wall Street Journal. "Bitcoin exchanges in China are again allowing withdrawals of the virtual currency, having upgraded their systems in response to heightened government scrutiny." https://www.wsj.com/articles/china-bitcoin-exchanges-allowing-withdrawals-again-1496658845
Citing the recent decision of the U.S. Commodities Futures Trading Commission to officially defining bitcoin as a commodity, the publication continued "although some people think that bitcoin and its underlying technology, the blockchain, is not stable, we cannot ignore the revolutionary changes it brought to the financial sector.
The new technology has led to the expansion of a distributed payment and settlement mechanism, which will innovate financial transactions." Noting decreasing volatility, the report claims digital currencies have entered a 'post Bitcoin era,' away from volatility and toward "regulation and mainstream development." China's regulatory approach to bitcoin has remained vague.
Bsiness Insider reported in December, 2016: The increased volume in the cryptocurrency comes as money continues to rush out of China. The country saw its foreign-exchange reserves shrink by about 8% in 2016 to $3.05 trillion as of November. The drop in reserves has occurred as China's currency, the yuan, weakened by 6% against the dollar in 2016. The currency is threatening to weaken below 7.00 per dollar for the first time since Q1 2008.Things aren't expected to get better anytime soon, either.
Deutsche Bank strategist Gautam Kalani recently called the yuan "the most expensive" currency in the world on a trade-weighted basis. While he didn't go into specifics, his call most likely has to do with the fact that as the dollar strengthens on expectations for Federal Reserve interest-rate hikes, the yuan gets weaker and money pours out of China. http://www.businessinsider.com/china-behind-latest-bitcoin-craze-2016-12
Additionally, Bloomberg economist Tom Orlik wrote, "China's corporates continue to hold on to almost half of their forex earnings — a sign that yuan depreciation expectations remain high." https://www.bloomberg.com/professional/blog/something-in-reserve-assessing-chinas-fx-buffer/