While Bitcoin price has been rather calm as of late, the return of Bitcoin volatility could be around the corner as China introduces new capital controls.
Also read: Bitcoin Price Pulls Back, But Hope for $800 and Beyond Still Strong
China Tightens Grip on Capital
Confirmation is coming out of China that new regulations are being placed on how businesses move capital in and out of the country. Considering the impact of China on Bitcoin, the price could be due for another spike. One source familiar with the matter told Reuters:
“The State Administration of Foreign Exchange (SAFE) has begun vetting transfers abroad worth $5 million or more and is stepping up scrutiny of major outbound deals, including those with prior approval.”
Chinese regulators are concerned about how much debt companies are taking on, and they feel that placing a limitation on outside or international deals is the best way to keep money from leaving the country. But since bitcoin has become a store of value as a hedge against a falling yuan, the “digital gold” currency could continue on its upwards trajectory.
“Previously, only forex transfers worth $50 million or more needed to be reported to SAFE. Now, the threshold has been drastically lowered to $5 million, and covers both foreign currency and yuan,” the source added. “All we can do is to ask clients to be patient, and tell them that the transaction is being vetted by SAFE for authenticity and may not be approved.”
Since individuals can freely trade Bitcoin in China, it should remain as one of the few loopholes to move large amounts out of the country.
Today, the Bitcoin price has already seen a spike of almost 2% to $745 USD. If the $750-760 resistance levels are broken, this will put $800 within reach.
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Image courtesy of Bitcoin News
