As the dollar drops, and fears over US trade action may exaggerate capital outflows in China, Bitcoin has renewed its rally post-Golden Week to new record highs. The virtual currency is up 10 days in a row as we noted previously that the Chinese have discovered a workaround for the PBOC's crackdown on Bitcoin exchanges.
Record highs in USD terms... (not yet record highs in Yuan terms)
As we noted previously, China’s central bank has stepped up oversight of bitcoin exchanges this year, leading major trading platforms to impose halts on withdrawals and other checks to appease the regulator. But, as Quartz reports, Chinese traders aren’t playing along—they are apparently flocking to peer-to-peer marketplaces to continue buying and selling bitcoin.
As Yuan trading on bitcoin exchanges has plummeted...
Quartz notes that one of the longest established peer-to-peer marketplaces is LocalBitcoins, which acts as a kind of directory for buyers and sellers to find each other. Users can arrange to meet in person, on chat platforms, or talk on the phone to arrange exchanges involving bitcoin.
Yuan volumes on the marketplace have exploded in the past week. Trading on LocalBitcoins currently accounts for about 6% of the total trading volume in yuan, according to data source Crypto Compare.
And Bitcoin prices have practically erased all of the Chinese crackdown losses...
It seems the Chinese will not be stopped in their effort to get capital out of the country - even as the PBOC spends billions propping up the currency in the short-term to create the illusion of stability.