- Bitcoin demand is high in China despite the strong yuan’s record-breaking last quarter
- Chinese capital moves into the Bitcoin market
- After the apparent flight of capital from the country, it is coming back
The demand for Bitcoin is high despite the Yuan rising. It is surprising that cryptocurrency traders want to hold Bitcoin even now when the yuan is also rising. Weaker yuan is more favorable for cryptocurrency traders and increases their exposure in crypto. The changed traders’ sentiment became obvious in the week behind us.
Offshore and onshore yuan is growing
The offshore yuan has jumped more than 1% last Friday, from levels above 6.83 to as much as 6.74 for one US dollar. The Yuan hasn’t reached such a strong comparison against the dollar since May last year.
The same happened to onshore yuan, it also increased by more than one percent during the same week. According to historical data, both offshore and onshore yuan have increased by more than five percent against the US dollar over the past four months.
Bitcoin against both yuan showed an increasing trend as well. It increased by six percent over the last week continuing strong growth over the two weeks before. The conversion rate was CN¥73,958 on Friday, September 18th.
The Chinese capital moves into the Bitcoin market
China’s economy is recovering after the Covid-19 outbreak, but as it does, so too does an increase in the value Yuan – which some analysts say is due to the weakening US dollar. On the other hand, despite the Yuan’s success, the Chinese capital has moved onto the Bitcoin market.
China’s capital is becoming increasingly involved in the Bitcoin market as Chinese traders take part in the crypto market, now more than ever. Paxful reports that local traders are selling BTC at a price of $20,000, which is almost twice the rate than it is currently on other exchanges.
In August this year, China’s traders had moved $50 billion in stablecoins out of China in order to get around the stringent Beijing rules that limit capital outflows. This return of capital on Chinese crypto markets suggests that earlier flight has reversed the direction.