Things aren't expected to get better anytime soon, either.
Deutsche Bank strategist Gautam Kalani recently called the yuan "the most expensive" currency in the world on a trade-weighted basis. While he didn't go into specifics, his call most likely has to do with the fact that as the dollar strengthens on expectations for Federal Reserve interest-rate hikes, the yuan gets weaker and money pours out of China.
In his latest edition of "Greed & Fear," CLSA's Christopher Wood notes, "Daily turnover in Shanghai-based BTC China, the world's largest bitcoin exchange by volume, has risen from around Rmb1bn in late September to a peak of Rmb27.8bn on 22 December and Rmb16.4bn on Wednesday (see Figure 11) while the Bitcoin price has risen by 70% over the past three months to Rmb6,927."
So what's behind the move?
Additionally, Bloomberg economist Tom Orlik wrote, "China's corporates continue to hold on to almost half of their forex earnings — a sign that yuan depreciation expectations remain high."
Of course, that will be even more positive for bitcoin.
Bitcoin had a great 2016. The cryptocurrency rallied 120% to $952, threatening to break the $1,000 mark for the first time since 2013. While bitcoin has seen a consistent bid throughout the year, its 57% gain (in US dollar terms) over the past three months has been particularly impressive.
In fact, it's possible that the yuan's depreciation kicks into a higher gear, causing money to flee China at an ever faster rate. That's because at its most recent policy meeting, the US Federal Reserve appeared to be a bit more hawkish than previously expected. The Fed said it had begun to expect three rate hikes in 2017, up from its previous forecast of two. If that happens, the dollar will get even stronger, and the yuan will get weaker.
The increased volume in the cryptocurrency comes as money continues to rush out of China. The country saw its foreign-exchange reserves shrink by about 8% in 2016 to $3.05 trillion as of November. The drop in reserves has occurred as China's currency, the yuan, weakened by 6% against the dollar in 2016. The currency is threatening to weaken below 7.00 per dollar for the first time since Q1 2008.
CBOE Saw Its Highest-Ever Bitcoin Futures Volumes Yesterday
Two major markets for bitcoin futures contracts saw a major boost in volume on Wednesday.
Available market data shows that CBOE saw its highest-ever volume for bitcoin futures since it first debute
Former Paypal CEO says investors are drinking the bitcoin 'Kool-Aid'
Former head of online payments giant Paypal is bullish on the future of digital money but maintains that bitcoin is a scam. "Everyone is drinking the Kool-Aid," Bill Harris, former Paypal, CEO
OmiseGo Hits Two-Month High Amid Exchange Listings
OmiseGo's OMG token is reporting double-digit gains today, figures that throw shade on the rest of the top 25 cryptocurrencies by market valuation.
Having clocked a two-month high of $20.67 earlier
More Than $140 Million in Bitcoin Moved from Mt Gox Wallets
16,000 bitcoins (an amount worth about $141 million) tied to the now-defunct bitcoin exchange Mt Gox were moved on Thursday.
According to CryptoGround, which monitors Mt Gox's remaining wallets, th
Crypto Mining Made Up 10% of AMD's Revenue in Q1
Cryptocurrency mining demand accounted for as much as 10% of AMD's first-quarter revenue this year, according to the chip maker.
"The strength in Radeon products was driven by both gaming and block
Romania's Oldest Bitcoin Exchange Is Shutting Down Next Week
Romania's BTCxChange announced it was closing its platform earlier this week.
In a notice dated April 22, the nation's oldest cryptocurrency exchange told its customers to withdraw all of their rem
Ripple Says Sales of XRP Cryptocurrency Rose 83% In Q1
Ripple reported Wednesday that sales of its cryptocurrency XRP totaled $167.7 million in the first three months of 2018, an increase of 83% compared to the previous quarter and of 2,400% compared to t
There are now 17 million bitcoins in existence — only 4 million left to 'mine'
More than 80 percent of the bitcoins that will ever exist have now been created. The 17 millionth bitcoin was "mined" Thursday, according to data from Blockchain.info, more than a year since the