As the price of Bitcoin continues its wild ride, expert observers weigh in on the reasons: China, halving, Japan, Brexit ‒ all seen as factors. But every analysis includes the current situation in China where an uncertain economy and yuan devaluation seems to be causing a marked increase in Bitcoin trading volume.
Bobby Lee, CEO of China’s BTCC exchange, sees this as the natural progression of a very good idea whose time has come. Lee told Bitcoin Magazine:
“The recent price rise could be because people are finally catching up to the fact that Bitcoin is truly a suitable global asset class. More and more people are buying into this argument. If you look back at the last eight years, Bitcoin has essentially gone up several times each year.”
A strong believer in the intrinsic value of Bitcoin, Lee is not overly excited about the current price surge, but sees it as a continuation of a long-term trend:
“I’m optimistic about Bitcoin as a digital asset. For Bitcoin to gain widespread adoption in the next 20 years, it has to be valued at much more than the $10 billion that it currently is in terms of circulation value. I believe that Bitcoin will be successful globally in the next 20 years, meaning that it will be multiples and multiples of where it stands today.”
China’s Capital Controls Not a Factor in Rising Bitcoin Price
Lee has noted previously that the yuan devaluation has had an impact on the Bitcoin market. He told Bitcoin Magazine in a May article:
"BTCC has seen very high trading volumes this past weekend. In fact, on our Pro Exchange, we saw record volumes on Friday, the highest ever since our launch last October. This recent rally was indeed led by the China market, which gives credit to the theory that people were predicting today's yuan devaluation."
However, Lee is adamant that the Chinese government’s capital controls are not a factor.
In a speech to a Stanford University audience recently, Lee reiterated that capital controls have no effect on the price of Bitcoin. He noted that investors are buying up bitcoins but aren’t necessarily sending their bitcoins out of the country and, in any case, “there are lots of ways around the current capital controls.”
Scaling Debate Not a Significant Factor
Lee acknowledges that the scaling debate has used up lots of oxygen in the space recently, but he believes it is not as serious as some would have us believe:
“The scaling debate has been over-reported. I think the two sides were too public in their debates and fights. The recent two months have been better in that there’s been less public arguments and exchange of insults. I think the community should let the developers go and figure out a solution. I think everyone wants to scale Bitcoin; there’s no question about that. It’s just a matter of which solution makes sense.”
Chinese Government and PBOC Allowing Innovation to Flourish
Lee sees a government and central bank that are willing to give Bitcoin some breathing room ‒ limiting restrictions as much as possible.
Lee told the Stanford University audience that he believes the Chinese people have a special view of the future and see the coming globalization as a natural historical progression.
“So, most likely, the PBOC [People’s Bank of China] will not develop a digital currency that is both decentralized and limited in issuance, and I don’t see any threats to Bitcoin from central banks. However, I do think that it is great that the PBOC is looking into the technology behind Bitcoin. I think all central banks should look into this technology, and look into adopting existing digital currencies like Bitcoin as part of their basket of reserve currencies.
“I believe that Bitcoin will remain the most valuable digital asset of choice.”
Asked about his view of Ether and other competing altcoins, Lee said:
“The world has room for lots of digital currencies. I think there are probably four or five mainstream digital currencies. There are also 700 or up to a thousand total digital currencies in circulation. Many of them are not well known. In any case, I believe that Bitcoin will remain the most valuable digital asset of choice.
However, different digital currencies can have different uses. Ether is used in smart contracts and so on. There’s Dogecoin, Litecoin, Ripple and many other decentralized digital currencies. They all have their uses, but in the end I think one currency will dominate in terms of market value, and for now and, I believe for the foreseeable future, that currency will be Bitcoin.”
Upcoming Halving a Factor in Price Surge
In recognition of BTCC’s fifth anniversary and to get ahead of the July halving, the exchange recently released its Five Bitcoin V Series. The Five Bitcoin coin is made of titanium and has already sold out.
“I’m a big fan of bitcoins, and I think that physical bitcoins are a great way to promote the value of Bitcoin and digital currency because they’re something that people can hold and touch and see. Physical bitcoins allow people to see with their own eyes how a string of numbers can have value attached to them. This is revolutionary, and is a great conversation starter to get people talking about Bitcoin.”
“The upcoming block halving was indeed one of the timing considerations for the release of these physical bitcoins. We wanted to issue our first series of physical bitcoins before the block halving so that people get access to the new coins that are still part of the 25 BTC block.”
Lee is confident that Bitcoin will survive and prosper into the future:
“We’re working hard to realize our vision of a world in which everyone uses Bitcoin. Our company mission is to give the world the most convenient and trustworthy digital currency services. So we will not rest until we ensure that everyone uses Bitcoin and other digital currencies, and BTCC is the premier provider of Bitcoin and digital currency services.”