After the recent RMB devaluation, Bitcoin transaction volume increased dramatically according to Babel Finance, Asia’s largest commercial crypto financial service provider.
Bitcoin’s recent price hike can be attributed to a number of factors, including monetary easing by central banks and Facebook’s plans to develop its own digital currencies. One notable phenomenon, according to Babel Finance, is that more and more Chinese and American investors are buying Bitcoins. China’s Bitcoin trade volume has been growing, at one point even reaching a rate of 50%.
At a recent press conference in Hong Kong, Babel Finance founder and CEO, Flex Yang said there are three reasons for the popularity of Bitcoins.
First, Bitcoin prices have become more correlated with gold prices since May 2019. While gold has always existed as a hedge against various governments’ mismanagement of the money supply, Bitcoin exists as a way to avoid overbearing financial surveillance. In the long term, it would make sense for Bitcoin and gold to become even more correlated, since Bitcoin is already viewed as a digital alternative to gold.
Second, Bitcoin has gained dominance in the cryptocurrency market, so it may attract more investors. Bitcoin’s price has more than tripled in 2019, increasing from under USD 4,000 at the start of the year to about USD 14,000 in June.
Third, more investors are recognizing Bitcoin’s value as a risk-averse investment tool. Bitcoin is currently trading above USD 10,000 and is outperforming gold amid heightened uncertainty in global markets.
Babel Finance also noticed some other trends in the crypto market. Yang said that Facebook’s cryptocurrency, Libra, might be positive for the crypto market because it may lower the education cost for average investors and increase their interest in cryptocurrencies.
Founded in July 2018 in Hong Kong, Babel Finance boasts outstanding loans of over USD 200 million and is the second largest crypto currency lending platform in the world after Genesis Capital. Babel provides crypto-backed loans, deposit services, financing, margin trading, and other derivatives services.
