Bitcoin Surges To 2016 Highs On Rising Chinese Demand; Decouples From Gold

Ever since last September, when we explained that as a result of China's crackdown on capital controls, the one clear winner (in addition to Vancouver real estate) would be bitcoin, the digital currency has more than doubled in dollar terms, rising from $230 and surging as high as $500 a few months later. Overnight bitcoin, which had traded in a stable range with little of its characteristic volatility in recent months, made its latest breakout, surging nearly 5% from a $440-level, to a fresh 2016 high of $480, and has since retracted the move modestly, trading at $475 at last check.

 

 

This pushed bitcoin's price to the highest since its sharp breakout in early November, when it breifly topped $500.

 

The rally started late last night, with bitcoin trading at around $450 when a 30-minute jump saw bitcoin price trading at $461. Before long, bitcoin price was hovering near the $470 mark.

According to Cryptcoinnews, the increase in price can be attributed to the growing demand from the Chinese market, as predicted here almost a year ago when the price was 50% lower, as a result of the recent Yuan devaluation. CCN elaborated on the BTC/CNY exchange charts in yesterday’s analysis piece, speculating that the price will eventually strike out for $500.

The last rally in bitcoin occurred last month to this very day, with trading hitting a high of $470 in the days following the release of the Segregated Witness (SegWit) code by developers.

A notable observation about the recent breakout in bitcoin is that the digital currency, which for a period had tracked moves in gold, now appears to have officially decoupled from the precious metal.