By
Godfrey Benjamin
April 16th, 2024
The value of digital currency surged to a 10-week high on October 11, following the devaluation of the Chinese currency that led to a growing bitcoin demand.
The bitcoin price skyrocketed to $633 on Tuesday, up from $618 earlier that day. Within three hours the value of digital currency gained a 2.5% growth, according to CoinMarketCap display.
The rise is attributed to the decreasing value of yuan, which dropped to a six-year low of 6.72 on Monday, the first day of trading after a long national holiday. The last time the Chinese currency fell to 6.7 level was in July, after what bitcoin price reached almost $700, the highest level in two years.
Coinmarketcap’s illustration is similar to BTCCNY Bitcoin chart on Trading View, which demonstrated that between 5-6 a.m. the bitcoin price moved from 4150/BTC to 4260/BTC, showing a 2.7% increase.
Unlike the previous price fall, Reuters reports, this time the central bank took no measures to fix the situation, so investors turned to digital currency. In general, given the devaluation of yuan the demand is rising not only for bitcoin, but for other alternative currencies as well.
Over the last three months, the cryptocurrency’s value remained relatively stable, ranging between $420 and $450. This latest hike has been registered twice – in July 2016 just before the Bitfinex exchange hack and between November 2013 and January 2014.
The lack of central control makes bitcoin attractive for users who want to anonymously move funds around the world. Currently, the majority of bitcoin trading volume comes from China, so any growth of demand for digital currency has a significant impact on its price.
“The Chinese central bank’s decision not to intervene in stabilising the yuan means traders are running scared. Bitcoin is a port in the storm,” said Charles Hayter, founder of cryptocurrency website Cryptocompare.
Some cryptocurrency analysts consider the recent summit held in Milan to solve the problem of bitcoin capacity may have affected the price as well. The speakers of the event discussed a number of technological improvements that could be used to increase transactions in the bitcoin network.
“There were several technological advancements demonstrated, some of which could be promising avenues to increase the number of transactions that the bitcoin network could process,” said Colin Platt, co-founder of blockchain startup DPactum, and former head of blockchain at BNP Paribas.
“These new advancements could once again position bitcoin to continue to innovate and sustain higher transaction rates which could foster wider adoption,” he added.
The growth of bitcoin price is likely to continue in the near future, unless the situation on the Chinese market will stabilize.