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Bitcoin Retreats to Its Lowest Level in Two Days

November 3, 2016 at 16:53 by Yahia Barakah

After rising to its highest level in several months, Bitcoin sharply dropped to give up most of its gains over the past two days.

The daily trading volume of the virtual currency hit all time high on Thursday due to increased activity from buyers in China, who are using the currency to go around current regulatory policies on capital movement in the nation. However, Bitcoin prices in Chinese exchanges including BTCC, CHBTC, and OKCoin remained almost unchanged over the past few days.

On the other hand, the cryptocurrency’s valuation in US and European markets continued to rise on speculation that Chinese demand will continue to push Bitcoin higher but the stable price in China and its neighboring countries including Japan and South Korea soon grabbed western prices down as the substantial difference in gain came to an end.

Yet traders forecast that Bitcoin prices will start rising again quickly due to the Chinese government’s crackdown on wealth management products, in which Chinese investors preferred to invest to avoid strict currency and capital control laws. The recent crackdown is forcing investors to look for alternative assets for their 1.9 trillion dollars that are currently stored in Chinese wealth management products. One of these alternatives is Bitcoin, which would see a staggering rise in value if only a small percentage of these funds were invested in it.

Another supporting factor for the digital currency in the few coming days will be the tightening presidential election race in the USA, which is placing a lot of pressure on the US dollar that has been declining for most of the current and previous weeks.

This comes as Democrat presidential candidate, Hillary Clinton, fell closer to Republican Donald Trump in recent polls. Anxious investors are moving their assets into safe havens like gold, Japanese yen, and Bitcoin, which is growing as a hedging asset for US investors against times when the dollar is bearish.

BTC/USD traded at 714.9 as of 16:31 GMT after it touched 745.2 at 06:15 today, its highest level since June 20.

If you have any questions and comments on bitcoin today, use the form below to reply.

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