Chinese bitcoin exchange BTC China hit its all-time high at the weekend, trading bitcoin at ¥1,978 each.
The record surpasses the previous Chinese high of ¥1,944 back in April this year, which, although Western media generally quotes the Mt. Gox high of $265, was actually equivalent to approximately $308.
It seems the Chinese are willing to pay premium prices for their bitcoins, as exemplified by this recent breakout, with reports that much of the recent surge in the value of bitcoin can be attributed to the enthusiasm of Chinese traders.
The thirst of Chinese traders
BTC China CEO Bobby Lee reports that his company is breaking records on a daily basis, crossing over into 90,000 in trade volume in one day, with their current spot price ¥2,942, 10% higher than the price on Bitstamp and 5% over Mt. Gox, which Lee says demonstrates how the thirst of Chinese traders is leading the market.
[post-quote]
“This is similar to what happened in April, where we saw trading well above $265 for over 12 hours. This time, it seems to be lasting longer. We hope that, this time, there won’t be such a severe price correction as in April,” he said.
Lee recently told Forbes that BTC China’s recent elimination of trading fees helped to boost interest in bitcoin. “It was a strategic move to increase trading in China and draw people to our site,” he said, and it appears to have worked.
When asked about why people in China are suddenly so interested in bitcoin, he responded: “China has been known as a nation of savers, who are always saving for a rainy day. Bitcoin is a digital asset, like real estate, gold, or stock. It is just one more option now. With Bitcoin hard-coded to be limited, it’s like a collectible.”
Bitcoin for real estate
Another factor in the story of bitcoin’s rise to prominence in China is the revelation that real estate is moving into the bitcoin space too, with Finextra reporting that Chinese IT giant Shanda’s real estate development arm is offering its new apartments in exchange for bitcoin as part of a new promotion in Zhangjiang Hi-Tech park in Shanghai.
Some 300 apartments in soon-to-be-built buildings ranging from 42-81sqm were made available to buy at around 800 to 1,000 BTC each, at a fixed exchange rate of ¥1,000 per bitcoin. They all sold out in only a few minutes.
This is an example of how bitcoins can be applied to any industry, but Lee is quick to point out there aren’t many businesses in China that accept bitcoin yet, and it is still largely a vehicle of investment and speculation. He said that, while bitcoin is still legally a grey area in China, “the government and banks are less afraid of grey area businesses than those in the US are”.
“The law has not caught up with technology. I want China to re-evaluate its laws so we can classify bitcoin and the government can regulate it,” Lee concluded.