Why is Bitcoin in China off the charts? I mean really?
After much research Ive essentially found out that the Chinese see Bitcoin as a retirement investment. Due to a recent influx of local Chinese TV specials many of its citizens view it as a safe bet. That translates into the price per Bitcoin raising daily. More and more people are investing to secure their futures. Not to mention the growing number of merchants accepting them as valid forms of payment. Not just in China but all over.
However with all this investing economists warn that this could cause the market to become unstable. With so many investors who is actually using is to spend? Basically because the price is driven so high (mainly by investments) it could bottom out at any time. People could just cash-in, Bitcoin would crash and it could be right back to its original price of just pennies. Only time will tell if it will be a solid investment or just a passing fad.
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Hi, I can answer your question. I was JUST in China.
The Answer: Chinese money is risky
The chinese government has been propping up the yuan for a while. They are dealing with a few issues. Wages are going up, exports are getting harder, and real estate prices have skyrocketed. Their stock market has almost crashed a few times and the only reason it didn't is the government, again, intervened to shore it up.
The wealthy Chinese KNOW that eventually there is going to be a huge drop, so they are trying to move their wealth outside of china. This is hard to do because the government (again) controls how the currency flows. So wealthy Chinese are looking for pretty much any option they can to hedge their bets.
There are a few answers they have found:
And probably others I'm not aware of. But this is why they want bitcoin: It allows them to move money to the "ether" where it's mostly out of view of the chinese government and nationalized so that IF (when) things crash, they have an exit strategy.
Most wealthy chinese are doing all 3
Not only does this further spread risk, but the combination becomes a perfect escape plan.
Expect this to continue for a while, especially since China is busy pushing around their neighbors in the south china sea. While the risk of war is low, it's there, and the Chinese know it.
Thank you for such a detailed response!
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