Bitcoin hits new 2016 high amid Chinese stock market volatility

Bitcoin hits new 2016 high amid Chinese stock market volatility

Popular digital currency bitcoin surged to a new level in 2016—its highest since February 2014—as traders fly to safety amid Chinese stock market jitters.

Bitcoin hits new 2016 high amid Chinese stock market volatilityOn Tuesday, the digital currency traded at a high of $793.27, according to BitStamp. This means that bitcoin has already soared 70 percent since August this year.

Tuesday’s bitcoin price broke the previous 2016 high achieved in the summer, when traders prepared for the halving process, or the scheduled shrink in supply of the digital currency. In August, bitcoin bulldozed its way past the $680 mark, hitting a high $689.87 with 15.65 million bitcoins in circulation—its highest since September 2014, when the cryptocurrency went on a free fall from more than $1,000 per single bitcoin.

This time, the rise in bitcoin is credited to the choppy Chinese stock markets, which were trading low for most of the day before it closed in a mildly positive territory. The Chinese yuan falling against the U.S. dollar has also given a boost to the digital currency. Dan Stanchfield, founder and chief executive officer of bitcoin wallet KeepKey, told Reuters that they’ve “been seeing lots of volume from China and also India.”

Previously, hedge fund manager Kyle Bass, who predicted the 2009 economic crisis, made another prediction that bitcoin may hit $850 soon—or as soon China’s legal tender drops further against the U.S. dollar. This year, the Chinese yuan has already fallen 6 percent against the dollar.

If Bass’s predictions come true, then the demand for safe haven assets like digital currency may drive bitcoin’s value up by as much as $100 in the coming months. After all, traders have been calling bitcoin a “safe haven” asset that shows its strengths as an investment vehicle “in times of macroeconomic uncertainty,” such as recession.

Current bitcoin price and trade volume

The price of bitcoin dropped slightly to $778.99 on Wednesday morning, with a trade volume of $7.67 million.