The price of bitcoin fluctuates around $295, the cryptocurrency growing after the news of insecurity in China.

According to CoinDesk, at 20:00 UTC Tuesday bitcoin index was around $295, which is 3.1% higher than in the previous day.

Current rally began on Saturday, slowed down on Sunday and again accelerated next day with Chinese-oriented bitcoin exchanges leading the way. During the rally, the price of bitcoin on OKCoin was usually 1-2% higher than on other markets.

The Chinese exchanges strengthened their positions on the market, according to trading volume. As bitcoinity.org reports, on 25 October the trade volume of OKCoin reached 52000 bitcoins a day. On 26 October more than 50% of all bitcoin exchange operations in the world passed through OKCoin.

^{Bitcoinity.org}

One can conclude that the present rally in bitcoin price may have some connection with the current situation in China. At first glance the activity on Chinese markets looks normal. Bloomberg reports a rise of indexes in Shanghai. However, the recent recovery is temporal. Last Friday China’s Central Bank cut interest rates, hoping to stimulate the struggling economy of the country.

The Central Bank did not manage to impress market players. One analyst told Bloomberg that he does not know “what the real benchmark rate for China is.” The feeling of insecurity may stimulate Chinese investors to buy bitcoin. If this interpretation is correct, than the situation is very similar to one in July.  At that time the crisis on Chinese exchanges stimulated the demand for bitcoin, which in turn raised the price of the digital currency up to $300.

Roman Korizky