Are Chinese buyers behind the scenes again? BTC is approaching $700

Recently, driven again by Chinese buyers, Bitcoin has risen rapidly. As of 8:43 a.m. Beijing time on Monday, Bitcoin rose 14% to $660.96; earlier today, Bitcoin once rose to $683.89, a new high since June 2014.

Bitcoin price hits two-year high:

Bitcoin has risen more than 250 percent since September last year, with the virtual currency's biggest driver now coming from Chinese buyers, who have a combined savings of $22 trillion.

China Savings

This past weekend, Chinese buyers once again set off a Bitcoin buying frenzy. The total market value of Bitcoin has exceeded $3 billion. The famous financial blog Zerohedge believes that perhaps we will witness the arrival of the second Bitcoin bubble, and the expansion of this bubble may dwarf the previous one. In 2013, the price of Bitcoin once exceeded $1,100.

On Sunday, the price of Bitcoin in China was 150 yuan higher than that of Bitcoin overseas, which also shows the strong demand for Bitcoin from Chinese buyers. Huobi and OKcoin, two Chinese Bitcoin platforms, account for more than 90% of the global trading volume. The current price of Bitcoin in China is the highest since May 2014.

Since September last year, both gold and Bitcoin have been rising, but Bitcoin has risen more fiercely.

Huobi.com's marketing manager Wu Xing told Wall Street Journal that China's bitcoin led the rise in the context of the depreciation of the renminbi, but this is not the main reason for the rise. Bitcoin will usher in its second halving in July this year, which is an important factor. Theoretically, there may be greater fluctuations in the future.

RMB depreciates as Bitcoin soars

Last week, the onshore and offshore RMB prices "parted ways". After the central bank lowered the RMB central parity rate last Monday, the offshore RMB continued to weaken.

Robin Brooks, chief foreign exchange strategist at Goldman Sachs, said earlier this month that "we are outright negative on the RMB." He believes that the risk of capital outflows may lead to an accelerated depreciation of the RMB, which will have a spillover effect on global markets, leading to similar turmoil as in August last year and January this year, and thus affecting the Fed's mid-year rate hike process.

In addition, disappointing Chinese export data for May released last week heightened investor concerns about capital outflows.

Today, the central parity rate of RMB against the US dollar was lowered by 212 points to 6.5805 yuan. This morning, the onshore RMB against the US dollar fell sharply at the beginning of the trading, down nearly 300 from the closing price of the night trading last Wednesday. Currently, the offshore RMB has rebounded slightly, with the offshore RMB against the US dollar at 6.5953.

Wall Street Journal previously mentioned that in just four days at the end of May, the price of Bitcoin soared by 20%. China is still the main market for Bitcoin transactions. Interestingly, the excess liquidity has caused the price of Bitcoin in China to have a 5% premium over that in foreign countries.

In May, Bitcoin and blockchain news website Cryptcoinews analyzed that the rise in Bitcoin was mainly driven by Chinese market demand brought about by the recent depreciation of the RMB.