During the last couple of weeks, bitcoin has once again proven that it remains a volatile digital currency which can be influenced by various world events. China’s influence on the digital currency is also well-known throughout the market, and in just 24 hours, the country has managed to make the value of the currency both grow, and decrease.
To put things better into perspective, China has been making numerous headlines due to the loss in their forex reserves, thus reaching a six-year low recently. Currently, the Asian country only has around $3 trillion in liquid forex assets, which is considerably low for a country as big as China, which also has an over-heated economy. Additionally, the capital outflow restrictions placed by the government are also not helping the economy either.
In fact, numerous investors throughout China have decided to put their money into Bitcoin, due to lower volatility, and no restrictions on capital outflow and inflow. This has led the digital currency to rise considerably in value, thus surpassing the sum of $1060 only a few hours ago.
The financial state in the United States isn’t looking too bright either, with Trump in office right now. Numerous investors have decided to look for ways of diversifying their portfolios, in order to counter-attack a potential financial crisis, thus leading to even more bitcoin investments, hence a higher value for the digital currency.
On the other side of the spectrum, bitcoin has also fallen in value quite a bit today, after reports emerged that the Chinese Central Bank is having a meeting with various representatives from local digital currency exchanges. The report was first issued by Bloomberg, and stirred controversies that the Chinese Central Bank and Government may be looking for ways to crack down on the market, thus reducing the influence of Bitcoin on the Chinese Forex market. So far, Chinese authorities have been lenient to bitcoin trading, and have allowed it to go on, with very few restrictions put in place. There isn’t much information referring to the issues discussed during the meeting, but it surely has caused some panic, thus lowering the value of the digital currency.
It’s also worth pointing out since the 4th of January 2017, when Bitcoin reached its highest value ever of $1,100, the price has been in a constant state of volatility, hence reaching $1,060 recently, and then dropping by around $20 for a single coin.
Based on everything that has been outlined so far, will future events continue to influence the digital currency positively, or will there be other exceptions that cause it to decrease in value, such as today’s meeting in China? Let us know your thoughts in the comment section below.