Bitcoin Is Soaring: Up Over 10% In One Week On Chinese Buying Spree

Earlier this week, we pointed out that after tracking the recent drop in the Yuan (alternatively, rise in the dollar), bitcoin unexpectedly spiked breaking out of its recent rangebound trade and rising to three month highs following news that China had begun a regulatory crackdown on wealth-management products, which indicated that some of the illicit money parked in these shadow bank conduits, which collectively house just shy of $2 trillion in assets, will slowly drift out of the mainland using such capital outflow “proxies” as bitcoin.

The next day we presented readers a report from Needham in which the investment bank explained, in fine detail the “fundamental” cases behind bitcoin going higher, and as a result the bank raised its price target on the digital currency to $848 from $655. Incidentally, Needham agreed with what has been the main catalyst for the surge in bitcoin since last summer, one we explicitly said would send the digital currency soaring last September (when it was trading in the low $200s, and urged readers to frontrun the imminent and panicked Chinese buying that was about to be unleashed).

This post was published at Zero Hedge on Oct 29, 2016.