Stacks of bitcoins stand in front of a U.S. one dollar bill in this arranged… Chinese investors are pumping up bitcoin again, sending prices up nearly 16% in the past four days just two years after the country that was at the center of a boom and bust in the crypto-currency.
The four-day surge in bitcoin since Friday has added $1.2 billion in market capitalization for all bitcoin in circulation, according to data from blockchain.info. On Monday, prices moved up as high as $525.49 per bitcoin, though that’s still well below the all-time high of around $1,151 in November 2013. Chinese bitcoin exchanges have been operating despite past efforts by Beijing to curb trading in the currency, which is not subject to any central authority and which can be traded almost instantly across borders.
Huobi and OKCoin, two Chinese exchanges, now collectively account for some 92% of global trading in bitcoin.
The surge in bitcoin buying this weekend could be the latest sign of how Chinese investors are moving money between asset classes quickly in search of high returns. In the past year, equities, bond and commodities markets in China have in turn seen massive surges of new investing, often followed by a collapse in prices as funds have moved elsewhere.
“There’s a lot of hot money in China that has to go somewhere,” says Du Jin, chief marketing officer at Huobi. Huobi has seen a surge of new registrants in the past one month, he said.
Expectations that new supply of the virtual currency will decrease next month could also be behind the latest price surge. The creation of bitcoin via a complicated computing process called “mining” gets more challenging over time, thanks to a mechanism which cuts the number of bitcoin that can be created in half every four years in order […]
