Buyer beware: The fate of bitcoin depends on China

Lead: The US CNBC website published in Thursday titled "Buyers beware: the fate of bitcoin depends on China" (Buyer Beware:bitcoin's fate could rest with Chinese) said that because of the high degree of Chinese recognition of virtual currency, In addition, the Government has not blocked this virtual currency, so the future of Bitcoin may depend on the development of China's market.

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In recent months, the demand for Bitcoin has grown sharply in China, and many people have seen the digital currency as a new form of investment. But the question follows: Is it a matter of sooner or later that the government is involved in this area?

China now accounts for 62% of the global Bitcoin market, according to Bitcoin average, an independent pricing website. This soaring demand has also made Bitcoin China surpass Mt. Gox, the world's largest trading currency exchange.

"The Chinese have long adapted to the digital currency, so the big heat of bitcoin in China is not surprising," he said. Patrick Murck, founder of the Patrick Mock Foundation, said.

While the renminbi-denominated bitcoin trade has grown 30 times times in the past two months, it highlights the Chinese interest in the virtual currency and pushes Bitcoin Wednesday on Mt. Gox's price for the first time exceeded $1000 trillion, but buyers also warned that the Chinese government had previously taken some restrictions on the virtual currency.

In 2009, the Chinese Government enacted regulations restricting the use of virtual currency to buy physical goods. The law is intended to curb the investment zeal of Q-coins. Although Q-coins were originally used for online games, they quickly spread to mainstream markets.

The New York Times reported last week that a deputy governor of the People's Bank of China, Yi Gang, said in an economic forum that it was impossible for the central bank to view Bitcoin as a legitimate financial instrument in the short term. But Yi also said that the public can freely participate in the Bitcoin market, some people will interpret this statement as a cautious license.

Merck that Beijing will not identify Bitcoin as an illegal currency. "The environment there is very different. Bitcoin is a decentralized virtual currency, and Q-Currency is a centralized virtual currency controlled by Tencent. The two have different risk situations. "he said.

The decentralized nature of Bitcoin is part of the reason it attracts Chinese investors. As the government does not allow the renminbi to circulate freely, analysts expect a flood of money into the bitcoin market to be more of a distrust of the renminbi than a trust in the digital currency.

Although the 18 session plenary said the government would loosen the renminbi policy, ItBit CEO Risham Dio (Richmond Teo) thought it would increase demand for bitcoin. "The convertibility of the renminbi will increase the demand for Bitcoin, because people crave faster, lower-cost trading." "he said.

The support of some celebrities also increased the popularity of Bitcoin. The Winklevosses brothers, who once had a fight over Facebook ownership with Mark Zuckerberg, have invested in bitcoin and are poised to set up the first Bitcoin trust. Recently, Virgin Group CEO Branson Richard Branson also said that the company's commercial aerospace company Virgin Galaxy will also accept bitcoin payment.

Merck says these public discussions have helped to legitimize bitcoin. "It is imperative that major businesses and entrepreneurs build the infrastructure necessary to ensure the security and reliability of Bitcoin." In the major exchanges, we have seen quantitative change to qualitative change. The exchange is becoming more and more quality and provides a more secure infrastructure. "he added.

ItBit recently raised 3.25 million dollars to launch a Nasdaq-backed platform to provide Bitcoin trading for serious investors, in a move designed to attract investors who value security. ItBit will store the customer's Bitcoin in an offline Bitcoin wallet and provide security features such as two-step security certification measures and withdrawal delays.

But the question remains: how much is the fair value of this virtual currency? "Fair value is hard to determine, and we think it should be several times now." "said Merck.