Wed, Nov 20, 2013 - Page 15 News List

Bitcoin’s gaining validity fuels virtual currency rally

‘FRENZIED BUYING’:US government acceptance is legitimizing the software currency, which has quadrupled in value in the past two months on booming demand in China


While demand continues to climb, with trading volumes up more than 400-fold in the past 12 months, supply is increasing at a predictable rate, thanks to the way the virtual money is designed. Those seeking to create new Bitcoins must use powerful computers to solve complex software problems embedded in the currency, which exists as software.

Bitcoin also gained further legitimacy and attention when a subsidiary of Baidu Inc (百度), China’s top search engine, started accepting Bitcoins on Oct. 15. Chinese Bitcoin activity has exploded, with the number of yuan-based trades jumping 30-fold in the past two months and making BTC China (比特幣中國) the top online-exchange by volume.

After Baidu’s decision and a documentary on Chinese television on Bitcoins earlier this year, interest in the virtual currency in China took off. BTC China surpassed Mt.Gox and Bitstamp earlier this month as the top market for exchanging Bitcoins with other currencies.

While BTC China’s average daily trading volume was about 1,100 Bitcoins during the month of January, transactions have been at about 90,000 per day so far this month, according to Bitcoincharts.

“I am very, very bullish on the price of Bitcoin,” Bobby Lee (李啟元), BTC China’s chief executive officer, said in an interview. “We’ve become the world’s largest Bitcoin exchange. We have the most liquidity. We’ll bring stability to the market in terms of price eventually. Until then, there’s going to be frenzied buying.”

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