The price of a bitcoin has jumped $150 so far this month and it’s only the 4th of Nov.
Bitcoin is the digital crypto-currency I wrote about last year, which I thought had great promise, but was not ready for prime time as the value soared to nearly $1,200, before crashing under the weight of fraud and manipulation charges.
This time seems different, but still scary for different reasons. Bitcoin is a much widely known commodity, with many retail and banking options. Although the wallets used to hold bitcoins are not up to being consumer friendly just yet.
So why is bitcoin jumping?
Well the Chinese government has put restrictions on their currency and capital controls on its yuan leaving the country at the end of October. Since then the value of bitcoin in yuan has risen Y900.
So doing the math, I would say the upper-class Chinese are bidding up the price as they convert their yuan holdings to bitcoins in order to get their wealth out of the country and into real estate and tangible assets here in the states and abroad.
So to call bitcoin a currency is a little disingenuous, bitcoin right now for the Chinese is a cheaper version of Western Union, without all the government reporting.
Once this operation is squashed by the Chinese government, which will probably be very soon, the price will more than likely fall back in the $400-$500 range, where it has been for most of this year.