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China is going crazy when it comes to bitcoin… bitcoin and gold.
China BTC Action Is Booming for Sad Reasons
Both assets make sense considering they are likely considered “safe havens” in that country and abroad. Both are known for retaining one’s wealth, especially in times of economic strife or some other global catastrophe.
Right now, the catastrophe that China is facing is the new coronavirus that’s spreading through its provinces. Thus far, more than 200 people have died from the disease, and many others are infected. In fact, several people from China that are seeking to travel outside their country’s borders are being detained and held for inspection, as is the case in areas such as Los Angeles, California.
Clearly, people are starting to get worried, and according to a new report, they’re taking strong action by putting away specific assets that can be used granted they are unable to work due to health concerns. This could potentially be why the currency has spiked more than eight percent in just the last week alone. As it stands, bitcoin is trading for well over $9,300 at the time of writing – the highest it’s been in nearly three months.
Gold, on the other hand, has soared in terms of the amounts being purchased. Business Insider reports that there are more than 2,500 tons of gold stored away in global exchange-traded funds (EFTs) at the time of writing. The last time this amount of gold was being held was back in December of 2012.
In addition, one ounce of gold is trading for more than $1,500 – considerably higher than the $1,400 price range it was enjoying at the beginning of last year. It’s estimated that gold prices have shot up by roughly 0.3 percent over the last few days alone.
The bottom line is that many people are beginning to lose their faith in cash. Paper money and other forms of fiat do not offer the same returns and interest rates that cryptocurrencies and precious metals do and keeping it in a standard bank may not be the best thing for you.
People Want to Earn Higher Interest
The annual interest rate for cash stored away in the bank is usually one percent or less, which means if you hold ten dollars in a standard account, you’re going to walk away with ten cents extra at the end of the year. That’s a very small number for your business.
At press time, more than 16 cities in China have been completely locked down to block the virus from spreading. Strangely, cases have also popped up in other regions outside of Asia such as France, Germany, Canada and Australia. It is estimated that more than 50 million people are being restricted and “held in place” as China seeks an end to the epidemic.