Bitcoin hits 3-month high as Chinese investors flee falling yuan
China currency traded offshore hits all-time low
Volume on Chinese exchanges surged over the weekend as the yuan weakened.
Bitcoin prices soared to their highest levels in three months over the weekend as Chinese investors sought protection from a weakening yuan.
Trading volume in China surged on Saturday, with nearly 99% of global trades executed on OKcoin, Huobi and BTCChina, three of the largest Chinese exchanges, according to CryptoCompare, a company that analyzes trading activity in several cryptocurrency markets, including bitcoin. OKcoin customers paid as much as 4,572 yuan, or $676, for a single coin, the highest level since mid-July, as prices on U.S.-based exchanges lagged behind their Chinese peers.
ne bitcoin US:BTCUSD was worth $654 on Monday, according to CoinMarketCap, its highest level since late July, as Chinese exchanges continued to experience heavy trading volume.
Bitcoin’s big move comes as the value of Chinese yuan USDCNH, +0.0206% traded in certain offshore markets fell to an all-time low of 6.82 to the dollar on Monday. The currency, which has weakened steadily since the beginning of 2014, has seen declines accelerate in recent months, thanks in part to Republican nominee Donald Trump’s slide in the polls, said Greg Anderson, global head of currency strategy at BMO. Meanwhile, yuan USDCNY, +0.0931% traded in the onshore market fell to 6.78 to the dollar, its weakest level in six years.
Some market strategists, including Yue Zhong, a China-based market strategist at FXTM, expect the Chinese currency to traded at seven to the dollar in the coming months, a level it hasn’t seen since 2008.
China’s foreign-exchange reserves, the best proxy for capital flows into, or out of, China, fell by $18.79 billion in September to $3.17 trillion, according to the People’s Bank of China.
Bitcoin prices cratered in early August after hackers stole nearly 120,000 bitcoins, then worth about $65 million, from Bitfinex, one of the world’s largest cryptocurrency exchanges.