China-related trading activity has driven a boom and bust in the Bitcoin market early in 2017, with yuan depreciation expectations driving abrupt price and volume growth, before reports of PBOC regulatory scrutiny caused a crash over the past week. As a vehicle for speculative investment and to reduce RMB exposure, Bitcoin remains sensitive to currency moves as well as regulatory changes (rumored or real), while its utility as a channel for actual capital flight from China remains small-scale.
