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Bitcoin Price Moves Closer to Highest Level of 2016

November 22, 2016 at 22:54 by Yahia Barakah

The price of Bitcoin is rising once again as the virtual currency moves closer to its best level of the year, which was achieved on June 19.

The volatile digital currency has recovered from a sharp decline earlier this week to return closer to its last week’s high, its strongest level in 5 months. Multiple different factors are giving support to Bitcoin, including a cheaper yuan and an Indian ban on certain banknotes.

The decentralized financial system that Bitcoin represents was the reason behind a surge in demand for the cryptocurrency in India after a shocking announcement by India’s Prime Minister Narendra Modi declared the 500 and 1,000 rupee bills as illegal.

Following the announcement, businesses and individuals rushed to change their worthless banknotes. However, since the sudden decision affected 86% of cash within the country, many resorted to Bitcoin as an alternative way to carry out transactions away from the local government.

Meanwhile, the People’s Bank of China continued to tolerate lower valuations for its currency, which is forcing investors within the country to shelter their capital in Bitcoin. The Chinese laws limit the movement of capital outside the country, which hinders investors’ ability to use traditional safe havens to hedge against the declining yuan. However, rumors have emerged of a possible crackdown by the Chinese government on the use of Bitcoin as a tool to leak capital outside the nation.

Bitcoin prices are expected to get a boost once Segregated Witness is activated on the currency’s blockchain network. A successful activation will solve the problem of scalability that Bitcoin have, which will bring concerns about the digital currency’s transaction capacity to an end.

BTC/USD traded at 747.1 at 22:30 GMT today from 736.6 at the beginning of the day. The pair touched 752.9 on November 19, its highest level since June 19.

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