Daily Express (UK) report discusses the role of China in the apparent burst of the Bitcoin bubble. Economically, we can not believe Bitcoin is a bubble, but many do believe that this is the case.
Whether they are right or wrong is totally up for debate. The report stems the fact that since September 2017, the buying and selling of Bitcoin against RMB (Chinese Yuan ¥) has fallen from 90% of the world’s total to just 1%.
This is of course due to the recent decision to ban cryptocurrencies in China. Experts now believe that increased interest in China between September 2017 and February 2018 had two major effects. First of all, it encouraged the price of Bitcoin to skyrocket. Flying prices and emerging currencies encouraged more and more Chinese interest. This in turn caused some concern as ultimately, with 90% of the worlds trading in Bitcoin coming through China, this could very well start the challenge the Yuan. Therefore, authorities implemented a ban. Through the ban, interest declined and along with it, so did the value of the currency. Causing what many people refer to as a bubble, to burst.
I don’t think Bitcoin is a bubble, economically speaking. Moreover I am not confident that the statistics provided by the Daily Express are totally accurate, they don’t make it clear if they are claiming 90% of all Bitcoin trading (against FIAT and crypto) came through China in September 2017, or if they are simply just referring to trading of Bitcoin against RMB. Latter the case, given that RMB is generally used only in China, Tibet and Zimbabwe then it is pretty clear that 90% of Bitcoin – RMB trading would be coming via China.
This is clear with this that this argument does make some sense and indeed, this move by the Chinese authorities had an impact on the markets, I think reference to a bubble is little extreme in this case.
What's your point of view do comment and tell me?