Bitcoin Surges As China Battles Capital Flight

Exploding bitcoin trade in China has sparked concerns the crypto-currency offers an easy route around foreign exchange controls.

That misreads how this market is functioning. Chinese investors would be daft to use such a volatile tool to hedge against a depreciating yuan, and the market is too small and unbalanced to channel capital flight.

When bitcoin crossed $1,000 per coin in 2013, thanks to surging Chinese interest, anxious officials stopped financial institutions from trading in bitcoin and made it difficult to fund accounts. That helped knock the global bitcoin price back down to $340.

Investors are understandably worried about a fresh crackdown, after central bank officials met the major local bitcoin exchanges on Friday; bitcoin prices shed 12 percent in reaction.

And superficially, the case for another purge looks more urgent. China is busy battling capital flight, making it harder for firms and individuals to convert yuan, and intervened to crush yuan short-sellers last week. Why spare bitcoin? After all, once a Chinese person owns bitcoin, they can swap it anonymously for dollars.

Fortunately for Beijing, it is not that simple. Using bitcoin, which routinely moves 10 percent in a day, as a hedge against a weakening but far less volatile yuan is dangerous, even if the ultimate goal is to use the bitcoin to buy dollars or euros.

Consider too, that Chinese exchanges now host 97 percent of global transactions, worth $143 billion in December 2016. There was only $1.1 billion in dollar-based volumes during the same period. That mismatch makes it hard for Chinese investors to swap bitcoin for hard currency at will.

As bitcoin prices rose on the back of global uncertainty, a herd of Chinese investors leapt aboard.

This was speculation, not flight.

There’s still little sign Chinese people are converting bitcoin to dollars en masse. Instead they trade amongst themselves under the watchful eye of Beijing. That is no crisis for the Chinese government. But it is a nightmare for those who hoped bitcoin would liberate commerce from the tyranny of central banks.

BreakingViews:       Bitcoin Just Isn’t Anonymous Enough:     Cybercrime Isn't The Reason Why Cash Remains King:

 

« Smart City Technology Is Growing
Fear Factor: Pushing Up Cyber Insurance Costs »

CyberSecurity Jobsite
Perimeter 81

Directory of Suppliers

CSI Consulting Services

CSI Consulting Services

Get Advice From The Experts: * Training * Penetration Testing * Data Governance * GDPR Compliance. Connecting you to the best in the business.

Jooble

Jooble

Jooble is a job search aggregator operating in 71 countries worldwide. We simplify the job search process by displaying active job ads from major job boards and career sites across the internet.

MIRACL

MIRACL

MIRACL provides the world’s only single step Multi-Factor Authentication (MFA) which can replace passwords on 100% of mobiles, desktops or even Smart TVs.

North Infosec Testing (North IT)

North Infosec Testing (North IT)

North IT (North Infosec Testing) are an award-winning provider of web, software, and application penetration testing.

ZenGRC

ZenGRC

ZenGRC - the first, easy-to-use, enterprise-grade information security solution for compliance and risk management - offers businesses efficient control tracking, testing, and enforcement.

Vertical Structure

Vertical Structure

Vertical Structure services include Security & Penetration Testing, Information Assurance, Bespoke Training Programs and Secure Hosting.

Soracom

Soracom

Soracom offers secure, scalable, cloud-native connectivity developed specifically for the Internet of Things.

Sabasai

Sabasai

Sabasai specialises in all aspects of insider threat management from training and education to building security frameworks and insider threat programs to on-site risk & vulnerability assessments.

GraVoc

GraVoc

GraVoc is a technology-consulting firm committed to solving business problems for customers through the development, implementation, & support of technology-based solutions.

Fraugster

Fraugster

Fraugster provides the most precise anti-fraud solution for e-commerce businesses.

Method Cyber Security

Method Cyber Security

Method offers a Cyber Security Risk Management training course for those responsible for the security of industrial automation, control and safety systems.

Strategic Cyber Ventures (SCV)

Strategic Cyber Ventures (SCV)

SCV grow cybersecurity companies that disrupt advanced cyber adversaries and revolutionize the cyber product marketplace.

SyferLock Technology Corp.

SyferLock Technology Corp.

SyferLock is an innovative provider of next-generation authentication and security solutions.

Uptycs

Uptycs

Uptycs combines the open source universal agent, osquery, with a scalable security analytics platform for fleet visibility, intrusion detection, vulnerability monitoring and compliance.

KrCERT/CC

KrCERT/CC

KrCERT/CC is the National Computer Emergency Response Team in Korea.

QuantiCor Security

QuantiCor Security

QuantiCor Security is one of the world’s leading developers and manufacturers of quantum computer resistant security solutions for IT infrastructures and the Internet of Things (IoT).

Advantex Network Solutions

Advantex Network Solutions

Advantex Network Solutions are a leading provider in Mitel, IT Solutions, Networking, and iP surveillance.

Easy Dynamics

Easy Dynamics

Easy Dynamics is a leading technology services provider with a core focus in Cybersecurity, Cloud Computing, and Information Sharing.

Aravo Solutions

Aravo Solutions

Your Extended Enterprise is full of hidden risks – Aravo makes them visible, measurable, and manageable.

Telindus

Telindus

Telindus is the strategic IT partner for the flexible organization of the future. We build optimal IT infrastructure with four components: networking, cloud, cybersecurity and data & AI.

Liberty Technology

Liberty Technology

Liberty Technology has a host of highly trained, certified experts who assist our clients with immediate remote support as well as on-site service.