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Chinese yuan dominates global bitcoin trade

Chinese yuan dominates global bitcoin trade

The majority of trading in bitcoins occurs in yuan as trade in the unregulated digital currency soars in the world’s second-largest economy.

As of Tuesday noon, around 58 per cent of the global trade during the preceding 24-hours occurred on exchanges trading the Chinese national currency, according to the open-source research project BitcoinAverage.

A Bitcoin logo is seen at the window of a restaurant that accepts Bitcoin, a form of digital currency, as payment in San Francisco. Photo: Reuters

According to the aggregator of market data, China’s trading volume in the period reached 827 million yuan (HK$1 billion).

Trades in US dollars account for roughly 37 per cent of global volume. Trades in euros account for slightly less than 2 per cent. No other currency accounts for more than one per cent of trade, according to BitcoinAverage.

Fortunes have already been made in China via the virtual currency. The value of a bitcoin in China soared 861.02 per cent from 844.75 yuan on September 3, the earliest data available on BitcoinAverage, to its peak value last Friday of 7273.47 yuan.

The virtual currency was trading at between 6,300 and 6,400 yuan on Tuesday morning on major Chinese exchanges.

Unlike with previous virtual currencies, China’s deputy central bank governor Yi Gang said last month that bitcoins could be freely traded, although the government would not accept them as currency. 

A provincial subsidiary of state-run China Telecom even said it would accept payment in the virtual currency. Jiangsu Telecom said last week it would accept the virtual currency for pre-orders of a new Samsung phone.

“China is driving the volume predominantly for two reasons: speculation and mining,” said Zennon Kapron, managing director fo the Shanghai-based financial advisory firm Kapronasia. “Returns on Bitcoin this year have surpassed real estate which previously was the best performing mainstream asset class in China, which has naturally attracted more attention and further driven the price up.”

Kapron said it was natural for China, the world’s biggest manufacturer of bitcoin mining equipment, to play a large role in the trade.

Li Lin, head of the Beijing-based Huobi trading platform, told the Beijing Morning Post last week that the majority of new bitcoin traders are women. Another trend is the popularisation of the currency beyond IT geeks and financial experts, she said, adding that a third of the trades on Huobi were made by large investors trading more than a million yuan. Li did not reply to requests for comment.

Another trend seen is the popularisation of the currency beyond IT geeks and financial experts, she said, adding that a third of the trades on Huobi were made by large investors trading more than a million yuan. Li did not reply to requests for comment.

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This entry was posted on December 3, 2013 by and tagged .

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bitcoinvancouver2013@gmail.com

bitcoinvancouver2013@gmail.com

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