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Suspension Of Chinese Yuan FX Trading To Set Off Bitcoin Rally

Source: bitcoin

Suspension Of Chinese Yuan FX Trading To Set Off Bitcoin Rally

If there was anyone left on this planet who thought there was nothing going on with the Chinese economy you might want to rethink that statement very soon. Over the past few months, the Chinese Yuan has been losing value, and things have taken a turn for the worse now that China suspended some foreign banks from FX trading. Capital outflows for the Chinese Yuan are getting out of hand, as investors are looking for a different safe haven.

Also read: Ukraine Economy Bailout Presents Bitcoin Opportunity

FX Trading Suspended Until The End Of March 2016

A country’s central bank does not often suspend [some] foreign exchange businesses of other foreign banks for an extended period of time. Every bank in the world is looking to diversify its portfolio at all times, and foreign currency is a big part of that. Now that the foreign exchange of Chinese Yuan is temporarily suspended, the question remains how this diversification process will continue over the next three months.

Taking such a drastic measure can lead to a variety of outcomes. First and foremost, temporarily suspending FX trading might nudge the Chinese Yuan into a more stable exchange rate on the global markets. Up until this point, the currency has been in a freefall for months, and various countries seem to be liquidating some of their Offshore Yuan assets.

Secondly, the suspension of FX trading will slow down the capital outflows of the Offshore Yuan, meaning more currency will be tied up in other banks’ reserves. This is a bit of a risky predicament for the affected banks and other financial institutions, as they have to hope the Chinese Yuan stabilizes in the next few months. If this would not be the case, they will be losing a fair chunk of wealth.

It is important to keep in mind this move could have a completely adverse effect on the Chinese Yuan value as well. “Open” capital controls are not something any country wants to publicly advertise, as it could lead to another massive devaluation of the national currency. FX traders will be keeping a close eye on the situation in China, as the result could go both ways.

Bitcoin Poised To Strike Again

The last time China unveiled their “open” capital controls, the Bitcoin price soared to very high prices. Now that FX trading is temporarily suspended for the next three months, there could be another major impact on the Bitcoin price as traders and investors will be looking to circumvent capital controls.

This is one of the reasons why Bitcoin is an interesting investment vehicle, other than for speculating on the future price point. Despite warnings by the People’s Bank of China, investors flock to Bitcoin because it’s the most convenient way to transfer value across assets, portfolios, and even the world. A major spike in Bitcoin interest will lead to another buying surge, which will only drive up the price.

What are your thoughts on the temporary suspension of Offshore Yuan FX trading? Will there be an impact on the Bitcoin price? Let us know in the comments below!

Source; Zerohedge

Images courtesy of Shutterstock, The Epoch Times

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Suspension Of Chinese Yuan FX Trading To Set Off Bitcoin Rally

Pro 29

Ukraine Economy Bailout Presents Bitcoin Opportunity

Source: bitcoin

Ukraine Economy Bailout Presents Bitcoin Opportunity

For some countries around the world, times are very tough as local economies are starting to fall apart. Ukraine is one of those countries, as inflation will be hitting a record-high of 44 percent later this year. Combine that number with a near 25-percent inflation, and anyone can see why the Ukraine economy needs a bailout. At the same time, Ukraine’s central bank is warning people about the use of Bitcoin and other digital currencies.

Also read: Pirate Bay Co-Founder Attacks Music Industry With New Gadget

Ukraine Economy Collapses After Conflict With Russia

There are several factors to blame for the collapse of Ukraine’s economy, although the biggest culprit comes in the form of a conflict with Russia. On top of that, the Ukraine economy is plagued by capital controls, making it all but impossible to move funds in and out of the country altogether.

With inflation hitting a whopping 44 percent, the situation in Ukraine is more than dire right now. Prices for goods and services have been soaring due to the Hryvnia losing a fair share of its original value, and consumers are faced with less purchasing power. Considering Ukraine was already subject to nearly 25% inflation back in 2014, things have not improved at all over the past twelve months.

But it looks like help is on the way, as capital controls will be lifted gradually in the coming months. Thanks to bail-out cash from international lenders, the Ukraine economy will survive, and hopefully be able to reduce its inflation rate to 5 percent by the end of 2019. In total, US$9bn in rescue cash will be coming to the Ukraine economy in the near future.

As one would come to expect, that money has to come from somewhere. The International Monetary Fund (US$4.5bn), the European Union (US$1.5bn) and a loan guarantee from the US (US$1bn) are pooling together the necessary funds to give Ukraine’s economy  a chance to recover in the next few years.

Time For Plan Bitcoin?

Similar to most central banks all over the world, Ukraine’s central bank is not too keen on Bitcoin and other digital currencies. Just a few months ago, a warning was issued regarding the dangers of Bitcoin, and consumers were advised to steer away from this type of currency as it is not controlled or guaranteed by the central bank.

At the same time, residents of the country have been struggling to make ends meet for quite some time now. With tight capital controls in place, there are very little options at the disposal of Ukrainians who want to safeguard some of their wealth from further economical demise. Bitcoin provides them with that option, despite warnings by the central bank. Plus, a new Bitcoin exchange will be launching in the country very soon.

What are your thoughts on the economic situation in Ukraine? Will Bitcoin provide a solution to the turmoil? Let us know in the comments below!

Source: Telegraph UK

Images courtesy of Shutterstock, Russia-Insider, Your News Wire

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Ukraine Economy Bailout Presents Bitcoin Opportunity

Pro 29

Blythe Masters Startup Digital Asset Holdings Struggles For Funding

Source: bitcoin

Blythe Masters Startup Digital Asset Holdings Struggles For Funding

The year 2015 has been quite a significant one for Bitcoin regarding the amount of VC funding flowing into the world of digital currency. However, not every Bitcoin startup is seeing its fair share of success, despite initial excitement regarding what they want to bring to the table. Blythe Masters’ Bitcoin startup – called Digital Asset Holdings – is struggling to secure additional funding,

Also read: Samsung Pay Bringing More Competition to Bitcoin by Enabling Online Shopping in 2016

The Digital Asset Holdings Struggle Is Very Real

When a former JPMorgan Chase star banker is having a hard time securing deals with other investors for her new Bitcoin startup, things are looking rather bleak. Although it has to be said these struggles are in part caused by Blythe Masters herself, as Goldman Sachs and Citigroup found out JPMorgan was getting a better deal compared to other interested parties.

Digital Asset Holdings is looking to explore the boundaries of blockchain technology, which is of great interest to any financial institution around the world. As one would come to expect, among interested parties are other banks and financial firms, some of which are directly competing with Blythe Masters’ former employer JPMorgan Chase.

But there are other factors at play in this story as well. Despite the general interest in blockchain technology, financial players are doubtful about the solutions being worked on by Digital Asset Holdings. Blythe Masters has cobbled together most of her startup’s offering by purchasing smaller startups and companies working on the same goal.

With so much competition in the technology space right now, it is difficult for startups to stand out among other companies. Even the blockchain technology development sector is getting oversaturated at this rate, and many companies have made bold claims they have yet to back up. Investors know this process takes time, but their patience isn’t endless either.

No one doubts Blythe Masters can be a valuable addition to the world of Bitcoin and blockchain technology. Her track record at JPMorgan Chase is quite impressive, as she helped develop the credit default swap in the 1990s. Projecting this knowledge to a different breed of technology will be quite a challenge, though.

Investors Are Not Convinced About The Solution

The major thing when it comes to attracting startup funding is ensuring potential investors like the product or service being offered. In the case of Digital Asset Holdings, investors aren’t convinced the startup is providing a service that will address the real problems in the loan market, let alone improve the situation.

Furthermore, rumours are spreading as to how Digital Asset Holdings is struggling to integrate the technology they purchased from other startups into a whole and complete ecosystem. This leads to a lot of frustration among the acquired employees as well, which is not beneficial to the development of this service.

What are your thoughts on Digital Asset Holdings? Will they secure enough funding to stay in business? Let us know in the comments below!

Source: NY Times

Images courtesy of Digital Asset Holdings, Blythe Masters, Shutterstock

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Blythe Masters Startup Digital Asset Holdings Struggles For Funding