Bitcoin value went up to 8 percent to $750, its topmost since early 2014, as anxious shareholders wanted shelter in the web-based currency, once considered too resilient to invest in, let alone at times of market stress. Since Britain voted to leave the European Union, as well as concerns over global growth, have pushed down stocks and oil prices, while low-risk assets such as gold and top-rated government debt have risen. Along with those conventional safe havens, shareholders have also turned to bitcoin.
The digital currency, which can move money across the world faster and anonymously with no need for a central authority, has climbed almost 70 percent over the past four weeks on the Luxembourg-based Bitstamp exchange. Gold, by comparison, has rallied almost 5 percent during the same period.
Daniel Masters, a former commodities trader who runs Jersey-based bitcoin hedge fund Global Advisors, said he had started to see commodity trading advisors put bitcoin into their portfolios over the past month or two. Other currencies had been weakened by the huge money-printing programmed completed in recent years by central banks. With the the Chinese Yuan hitting a five-year low, bitcoin traders said demand from China was also driving up the digital currency.
Around 95 percent of bitcoin trade is via Chinese exchanges, according to industry website Coindesk, so any increase in demand from China tends to have a significant impact. Bitcoin’s lack of central authority makes it enticing to those wanting to get around capital controls, such as those in China. Charles Hayter, CEO of London-based digital currency analysis website CryptoCompare said, Although Bitcoin is nascent, it fits the bill as a form of digital gold and as a route to evade capital controls.