Bitcoin's market value exceeds $14 billion for the first time since 2013. Is the depreciation of the RMB the main reason?

Following the bull run of Bitcoin, the total market capitalization of the cryptocurrency has also risen again. Earlier today, the total value of Bitcoin exceeded $14 billion for the first time in years. In fact, the value of Bitcoin has doubled so far this year.

In January 2016, the average trading price of Bitcoin was $425. Today, the price of Bitcoin has exceeded $875 (at press time, the average price on Chinese Bitcoin exchanges has exceeded $900). Although it is not clear what is driving the price increase, speculators have suggested that the depreciation of the RMB is the main reason.

Can Bitcoin Maintain a $14 Billion Market Cap?

As most people know, the vast majority of Bitcoin transactions come from China. It is becoming increasingly difficult to circumvent capital controls. Bitcoin as a safe haven asset provides investors with a way out. However, it is unclear how many people use Bitcoin to circumvent capital controls.

Considering that Bitcoin can be used to transfer funds around the world in seconds, it is not difficult to see how attractive it is. Through the use of many exchange platforms, holders can easily convert between national currencies and Bitcoin. In addition, the lack of intermediaries and central institutions also makes it a very speculative asset. However, Bitcoin is not only for speculation, it also has many real-life use cases.

Despite the new high, the price of a single bitcoin is still below its all-time high in 2013, when the price of one BTC reached $1,163 on the Bitstamp exchange. Speculators suggested that trading bots were used to drive up the price of bitcoin on the now-defunct Mt. Gox exchange, which resulted in a market value of $14.01 billion that year.

Other factors that contributed to the surge in Bitcoin are not hard to find, such as the ongoing demonetization in India and Venezuela, which has led to a surge in demand for Bitcoin in their countries, large banks being fined several times for improper operations, and the Italian banking crisis, which has caused European Bitcoin exchange trading volumes to hit new highs. In addition, global political instability should not be underestimated. Many things happening around the world today may determine the future of the financial industry and the role that Bitcoin will play.