The world’s largest crypto asset, Bitcoin, has hit an all-time high (ATH) against the Chinese Yuan (CNY) in the early hours of today. This follows a remarkable rally in the price of Bitcoin in the last two weeks as hype around the Bitcoin halving event builds.
Different Strokes For Different Folks
In a recent post on X (formerly Twitter), Lex—a Bitcoin supporter—highlighted that Bitcoin’s recent all-time high reflects the failure of various central banks’ monetary policies.
Bitcoin ATH in Chinese Yuan.
Bitcoin keeps exposing bad financial habits of central banks across the world. pic.twitter.com/r0rd0RGI8d
— lex (@mskvsk) February 28, 2024
Lex shared a screenshot of Bitcoin trading at 426,878 CNY. This is higher than its November 2021 ATH when the digital asset traded 424,793.38 against the CNY. While this is welcome news for many, Chinese residents cannot trade digital assets as crypto assets are banned in Asian nations.
Furthermore, a global discrepancy is evident. While Bitcoin trades above $60,000, it has yet to reach its November 2021 ATH of $65,000. However, against the Chinese fiat currency, the digital asset has already broken its previous record.
The reason behind this is based on two premises. Firstly, no direct Bitcoin/CNY trading pair is available in the Chinese market. Given this, Bitcoin is often paired alongside the US dollar (BTC/USD), denominating the value against the USD.
Soon after, the CNY/USD part comes into play. The Bitcoin price in USD is then adjusted to the price of CNY against the dollar. This is why the Bitcoin price has hit an early ATH in Asian countries.
Another core reason a lesser value outperforms the $65,000 ATH price level is due to the market valuation of the CNY/USD three years ago. Back then, the CNY lost its value against the dollar, making Bitcoin assets much cheaper than they are now. Consequently, Bitcoin assets are now more expensive, requiring CNY holders to pay more to access them.
Meanwhile, the CNY has not been the only ATH-breaking fiat pathway for Bitcoin.
Also in India pic.twitter.com/LHb2r4pyMN
— Varun (@cjvarun) February 28, 2024
Another crypto investor posted a screenshot in response to Lex’s post with the caption, “Also in India.”
Bitcoin’s Deflationary Model Makes It A Store of Value
Global events like the Covid-19 pandemic have adversely impacted the traditional financial market. Despite a return to normal activities, several financial bodies have battled economy-crippling inflation, with access to goods and services becoming more expensive.
Combined with global aggression across most of the Western hemisphere, the purchasing power of many people has significantly been impacted.
Bitcoin has been posited by many as a strong alternative to regular fiat. Its 21 million maximum cap ceiling and deflationary nature have seen many proponents label it as a viable store of value.
Lex’s comments surrounding poor business practices by central banks highlighted that value retention can be attained if money printing and relevant currency backing are retained.
Bitcoin’s skyrocketing prices are becoming even more attractive as many look to break away from state-controlled financial services.