The Chinese Just Found Out About Bitcoin

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A couple of months ago the Bitcoin community went silly with excitement as its value rose spectacularly against the US dollar, reaching the heady heights of around $250 for one Bitcoin, only to crash back down to around $80 within a couple of weeks. Such was the excitement during that roller-coaster that more than a few ‘outsiders’ who’d never even heard of the cryptocurrency suddenly had their curiosity piqued, and nowhere was this more true than in China – a nation that’s well known for its sharp business acumen.

You might think that the currency’s fluctuating valuation would give investors cause for concern, but apparently the opposite has proven true as far as China’s fortune seekers are concerned.

The credit for spotting this trend goes to the Chinese website Techweb.com.cn, which reports that within just a couple of months, the Bitcoin scene has completely mushroomed in Asia’s largest economy, growing from just a few scattered miners to into an operation that’s close to approaching industrial scale. The popularity of Bitcoin services in China has exploded dramatically, with platforms like FXBTC.com, Bter.com and BTCChina.com emerging as genuine alternatives to the troubled Mt. Gox. None of these sites have been around for much longer than a year, but in all three cases their Alexa charts show a sharp increase in traffic recently.

No doubt the international Bitcoin community will want to pay special attention to how the cryptocurrency evolves in China – it is, after all, the fastest growing economic power on the face of the earth, and I know from my own experience living in Asia that Chinese culture places a much higher value on investing and personal savings than us westerners do – presumably much of the new attention from Chinese Bitcoin buyers has come from those who see it as an investment, and these will eagerly waiting to pounce should we see anything like the ups and downs of last spring. Then again, what with China’s reputation for hacking, we could also see more incidents like the reported DDoS attack against Mt. Gox, which some say was an attempt to manipulate the value of the currency – although Mt. Gox later denied that was the case.

The other factor to watch will be the Chinese government’s stance on Bitcoin – if and when it decides to take one. To date, China’s leadership hasn’t uttered a single word about the cryptocurrency, but we can expect that to change if, as expected, China’s netizens’ interest in Bitcoin keeps growing. Should China decide to formulate some kind of policy regarding Bitcoin it would certainly get very interesting – after all, the country is often accused of manipulating the value of its own Renminbi currency, so it’s reasonable to assume that it wouldn’t just ignore the runaway growth of Bitcoin without at least trying to throw a few spanners in the works.