Chinese take out bolsters bitcoin to $930

In an abbreviated week of trading with volume being very low and volatility at an ever lower low, I don’t expect much in the way of movement in stocks.

Bonds on the other hand may move to higher yields as investors book losses this year to get the make tax deduction on capital losses.

Over the Christmas weekend both gold and bitcoin moved higher. What do these two securities have in common?

One is the oldest preservation of capital for a weakening currency, the other is the newest form of crypto-currency and a storer of wealth.

The Chinese yuan has lost about 3% to the dollar over the last three weeks, so bitcoin over the holiday moved from the $780 level to $930 this morning as Chinese money converts into bitcoin as a hedge on the weakening yuan and also a viable way to move highly restrictive yuan out of the country.

Gold and silver have seen a bit of a run up, but have plenty of restrictions and market forces going against them making a similar move as bitcoin less likely.

So look for markets to churn this week, without hitting the mystical Dow 20K level on very light volume.

Next week, however, could see the beginning of a big sell off as investors book gains in what is perceived to be a more favorable tax environment for capital gains in 2017.

1 thought on “Chinese take out bolsters bitcoin to $930

  1. Pingback: It’s early for stocks, bonds and bitcoin | GRAY'S ECONOMY

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