The chinese Yuan has been dropping in value over the past couple of months, showing the worst decline in 20 years. This is primarily due to large capital outflows in china, and also due to the tightening of capital controls, which have become progressively tighter in recent years. People are looking for ways to protect their wealth without governments taking what people feel is rightfully theirs.
Cryptocurrency is seen as a safe haven for Chinese investors among others, and as a means to move large amounts of money out of china with ease due to the difficulty of controlling the Bitcoin network. The political situation in china regarding capital controls have been quite volatile, although the Chinese government stopped short of outright banning Bitcoin and other cryptocurrency; the crackdowns on Chinese mining farms were merely due to power theft.
China has advantages where mining Bitcoin is concerned due to the cheaper power costs and lower costs to manufacture the hardware needed to do so. China still has much more backing its currency than the U.S Dollar however, as they actually have a large manufacturing industry in china.
The US Dollar seems to be holding it’s own at present, but it seems like another bubble just waiting to pop. The increased demand in Bitcoin from Chinese investors is also likely to increase the value of Bitcoin, due to how scarce the coins are. It would not be surprising if this is also playing a role in the large price increase in Bitcoin which has been seen lately.
Bitcoin is immune to government corruption if used as intended, as are other cryptocurrencies such as Litecoin. Unlike the U.S gold confiscations which took place nearly a century ago, confiscating private keys is much more difficult task and it is easy to squirrel them away.
Gold and Silver and other precious metals are still a good investment as they are physical, tangible goods and should never be underestimated. Bitcoins are seen as valuable due to their limited supply and consensus rules enforcing thus, but investors should always have multiple avenues, and precious metals are long since recommended for this purpose. However they cannot replace cryptocurrencies when it comes to moving wealth right under an oppressive governments nose.
We will update as more development on this becomes available, although it is likely this has helped contribute to the price rise that Bitcoin has seen this December.