The cryptocurrency is currently trading at its highest levels since 2014
Bitcoin prices have exploded since last week and are currently at a two-year high – and most of that action took place in China.
In the past 24 hours in China, 1.6 million Bitcoin worth nearly $850 million has been bought. Traders using Chinese yuan bought 18 times as many Bitcoin as those using USD over the past day.
Bitcoin is currently trading at just over $530, compared to a value of $453 last Thursday.
This behemoth Bitcoin buy-up comes as China’s yuan has reached a five-year low against the dollar. The weaker the yuan, the more people looking to get their money out of China – and the country has seen a large number of people turn to Bitcoin.
Getting money out of China
A tremendous amount of the global Bitcoin trades over the past 24 hours have been performed via OKCoin and Huobi, two of China’s biggest exchanges. BTCC, the country’s first Bitcoin exchange, has also seen its trading volumes climb dramatically
The chart below, taken from Bitcoin-tracking website CryptoCompare, shows the currency’s exchange rate explode over the last few days.
Bitcoin isn’t illegal in China, but it isn’t fully recognized and regulated either. Exchanges in the country operate in a bit of a gray area – buyers wire money to the exchange, which then gives them Bitcoin at an agreed rate of exchange.
Because wiring your money to a Bitcoin exchange is technically a domestic transaction, those purchases are out of the grasp of China’s strict currency regulations. The country has tried to limit currency outflows, which were estimated to hit $1 trillion last year, by passing a variety of laws around conventional currency conversions, such as from the RMB to U.S. or Hong Kong dollars – but not Bitcoins.
When the RMB drops, the BTC hops. The cryptocurrency is currently trading at its highest levels since 2014, and trades in RMB have jumped 27 percent over the past week. One of the chief criticisms of Bitcoin is its volatility – but sometimes, that works to your favor.
Editing by Steven Millward
This post was originally published on Tech in Asia.