2016 is quickly becoming the year of the alternative or non-dollar forms of money. Since January, gold and silver have outperformed every other currency, and are in fact two (gold being number one) of the best performing assets for the year.
But there is another form of money that has risen in value just as much as gold and silver, but is hardly being mentioned at all in the mainstream. And with a sudden jump overnight of over $50 in relation to the U.S. dollar, Bitcoin has now risen to its highest point in the past two years.
Once again, on a Saturday night (US time), Sunday morning (China) a sudden burst of buying pressure in Bitcoin, driven by Chinese buyers, has spiked the virtual currency higher on dramatic volume. With Bitcoin now trading at its highest level since May 2014 (in Yuan), and up 250% since we first suggested this an outlet for desperate-to-leave capital outflows in September, we note that the ‘arbitrage’ of over 150 Yuan points to massively more demand from Chinese buyers for now.
It appears, just as we initailly warned here, that more than a few of the few hundred million Chinese have decided that the time has come to use bitcoin as the capital controls bypassing currency of choice, and decided to invest even a tiny fraction of the $22 trillion in Chinese deposits… – Zerohedge
Perhaps the most interesting thing to note is the move by most investors away from Treasuries and other dollar denominated assets, even in countries like China which is seeking its own outflow of capital into better performing offshore assets.
Bitcoin use is also rapidly expanding in economies like Argentina, who has seen their own sovereign currency devalue heavily over the past 12 months.
Gold, silver, and Bitcoin are three of the top performing assets halfway into 2016, and forecasts for them rising much higher appear definitely in the cards as money managers across the board dump their dollar denominated equity positions and rush towards secure assets that are outside the purview of negative interest rates and central bank tampering. And for those that hung on to the crypto-currency following its tumultuous ride from 2011 to 2016, their proceeds will bear much fruit as thousands of investors pile into Bitcoin for any number of reasons.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com,Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.