Bitcoin collapses, investigations launched by China worry
(PBOC) said it has launched investigations against the bitcoin trading platforms, an announcement that augurs hardened controls and which caused the course of virtual currency to collapse by 15% on Wednesday.
PBOC units and municipalities in Beijing and Shanghai sent inspection teams to the offices of China-based bitcoins platforms, the central bank said.
The objective was to examine compliance with the rules on currency exchange, money laundering and financial risks, the institution said.
The announcement stirred fears that Beijing, in its concern to curb capital flight out of the country, hardened drastically its controls on the bitcoin, even though 98% of exchanges on virtual currency pass through the Chinese platforms.
Crypto-currency saw its value lose up to 15% during the day Wednesday on the Bitcoin Price Index, the average bitcoins trading platforms in the world, falling to 752 , $ 11.
This average bitcoin rate rose slightly on Thursday, trading at around $ 768, but still very far from its recent highs.
The virtual currency, which is not controlled by any central bank, had near the beginning of January, at more than 1,100 dollars, its historical record.
"The recent surge of the bitcoin was probably fueled by Chinese capital flight and speculation ... Fears of toughening Chinese authorities are likely to keep up the pressure," said Gil Luria, analyst at Wedbush Securities quoted by l Bloomberg agency.
The three main Chinese platforms (BTC China, Okcoin and Huobi), operating in yuan, account for about 98.4% of world trade in bitcoins, according to recent data from an industry reference site, bitcoinity.org.
The infatuation in the country has literally exploded in recent months.
On BTC China, the world's biggest platform for buying or selling bitcoins, the daily trading volume soared to 27.8 billion yuan on 22 December (3.8 billion EUR) against about 1 billion Yuan in September - while at the same time the price of the bitcoin in yuan climbed 70%.
A success directly linked to the strong depreciation of the yuan against the dollar, which encourages savers to take their capital out of China, trying to circumvent the strong restrictions imposed by Beijing. The bitcoin thus far escapes these limitations.
The bitcoin flies away. He crossed the $ 1,000 mark as he barely paid more than $ 400 in January 2016. The rise has accelerated since Donald Trump's election to the US presidency. The value of this cryptomata has thus increased by more than 60% in three months.
The movement could continue. "Bitcoin will climb to $ 2100 in 2017 because Russia and China will accept it as an alternative to the US dollar," said Steen Jakobsen, chief economist of Saxo Bank, in one of his famous "scandalous" forecasts. The virtual currency had reached the record level of 1163 dollars at the end of 2013, in a bubble air flight, even more spectacular than today. Before collapsing to $ 230 the following year. "The current rise is more stable and stable than at the end of 2013," observes Alexis Roussel, co-founder of Bity.com, a Romandy trader in Bitcoins.
The strongest currency in 2016
The reasons for the increase are many. "The size of the user base increases and leads to a price increase," says Alexis Roussel. The profile of buyers is expanding. It is no longer limited to experts in the digital world. The users are convinced by the virtues of speed of transfers and by the security of this currency based on blockchain, that is to say on a decentralized storage of transactions. Faced with this growing demand, the bitcoin stock is relatively stable, which explains the increase in its value. "It was the strongest currency in 2016, as in previous years besides, with the sole exception of 2014," analyzes this professional cryptomonnaies.
In early 2017, Chinese demand is presented as the main catalyst for the rise. "98% of the volume of the last 24 hours is of Chinese origin," according to CryptoCompare. Chinese users seek to protect themselves against a decline in the local currency vis-à-vis the greenback, according to the Marketwatch site.
