China versus bitcoin

It’s said that if you can’t stand the vertigo of a roller coaster, then do not ride in Bitcoin.

The movements of Bitcoin in January of 2017 have led to episodes of panic and hysteria. Volatility has returned and has been known, at least for now.

The explanations come from China, in a statement issued through the People’s Bank of China (PBOC) – the monetary entity of the country – to avoid capital bleeding and the collapse of bonds and its currency, the Yuan. The first thing it did was to issue a warning to investors, about a speculative scenario of magnitude that had been generated, by the use of bitcoin, to protect themself against the fall of the yuan. This caused a first collapse of the virtual currency.

China versus bitcoin

But most of the bitcoin exchanges are originated in China and earlier this month on the contrary prices rose above $ 1,100 per bitcoin after the yuan hit its lowest in eight years. “This pick-up in bitcoin over the past few weeks was probably due to the flight of Chinese capital and speculation, so worries that China will take a firmer position against the use of bitcoin is probably pushing prices up”said Bloomberg News Gil Luria, an analyst at Wedbush Securities.
But things did not stay put. China’s central bank took also action by inspecting the major financial institutions operating in the bitcoin market. Houbi, Okcoin and BTCC, operating firms in Beijing and Shanghai are being investigated for possible fraudulent maneuvers to gain an appreciation of the virtual currency. In a few days, the fall of bitcoin has already accumulated 40%. “When China sneezes, bitcoin catches a cold,” said Charles Hayter, CEO of digital currency comparison website CryptoCompare.

However, these types of actions historically have strengthened bitcoin in the medium / long term, so if strong regulations are established in a bitcoin-like country like China, we could well predict that the price of the cryptocurrency may triple in 2017.

It should also be noted that although China is the country with the largest number of Bitcoin transactions, the restriction of using bitcoin is aimed at banks and employees. However, it is not illegal for ordinary users. Today we are waiting to see if, in the defense of the Yuan, purchasing power and strength as a nation, it stays in the same form for a long term, since a large part is in these eastern lands.

But not only in China, bitcoin is being watched with certain fondness as an alternative of refuge to the volatility of physical currencies, but to other financial assets. The international panorama, with an appreciation of the dollar, the more aggressive policy on the part of the FED with respect to the interest rates of referece, they place the internet currency as one of the possible alternatives for this 2017, especially for the problems that would be presented in emerging countries and in China. Some analysts believe that it could end the year with a value close to $ 2,100 per unit.

As we have seen, we pass from euphoria to nervousness very fast, a simple news can raise or lower the Bitcoin, and yes, it can reach a weakness. But this weakness is part of us. So, is the community really strong? It should not be forgotten that the foundations of the criptocurrencies can not be only the miners or where they are,- although of course that is an important part-. But it is also the community, the users and ultimately us who make of Bitcoin a means of daily payment and also give value to it, taking advantage of its advantages: anonymity, security.

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