China continues to show an increasing demand for bitcoin and cryptocurrency right now. Since the market opened today, the price per BTC has continued its bullish trend, as it seems the demand from China is surpassing all expectations. Considering how Bitcoin’s value increased by over 14% in just three days, the question becomes how much longer his trend can continue for.
China Is Bitcoin-hungrier Than Before
Given the current Bitcoin price trend, it is not difficult to see why people would think we are in the next bitcoin bubble. Any asset that skyrockets over the course of a few days usually has to come down crashing hard. But with Bitcoin, one is never fully certain what will happen shortly. At the same rate, the demand for China is noteworthy, yet it remains unclear why his is going on exactly.
While it is true a lot of Chinese investors are looking to invest in assets that allow them to bypass capital controls, that alone can’t be the reason to pick Bitcoin. Despite its global appeal, Bitcoin’s market cap is still tiny. Them again, the Bitcoin market cap surpassed Twitter’s US$12bn, so it all depends on one’s perspective.
It is evident we are getting close to a new all-time high in trading volume and Bitcoin price at this rate. Unlike traditional asset markets, the Bitcoin price is entirely determined by the free market model.Prices will only go as high as the amount people are willing to pay for it. Right now, that means a price of US$900 per Bitcoin is both high, and severely undervalued at the same time.
One thing to keep in mind is how the trading of Bitcoin does not fall under the scope of the foreign exchange regulator in China. His ‘loophole” allows people to buy and sell cryptocurrency without it affecting their yearly foreign exchange limit of US$50,000. But if his bullish demand for cryptocurrency keeps setting new highs, it is not unlikely that situation will come to change very soon.
It would not be the first time the PBOC, together with Chinese government officials,m show their concern over Bitcoin and cryptocurrency. Stark warnings were issued back in 2013 when Bitcoin saw its all-time high value. But even despite their warnings, it remains unclear what the Chinese government could effectively do to curb Bitcoin trading. They can go after the centralized exchanges, but they are not the only platforms to buy or sell cryptocurrency.
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