Home » Business » Finance

THE price of Bitcoin hit a two-year-high and grew about 30 percent in the past week in China due to a flood of new Chinese investors as well as a drop in supply of Bitcoins from July and an easing investment environment, Shanghai Daily learned yesterday.

Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros. Instead they’re produced by people and businesses running computers globally, using software that solves mathematical problems.

The price of Bitcoin was 3,749 yuan (US$577) each at about 7:00pm yesterday, after it rose to 3,988 yuan — a two-year high, according to huobi.com, a Beijing-based Bitcoin trading platform. The price was just around 3,000 yuan a week ago.

“The trade volume and price both surged in the recent week, with many new registered investors coming every day,” said Du Jun, co-founder of Huobi, whose daily trade volume exceeds 5 billion yuan.

The price surge attracted about 10,000 new investors every day. More than 80 percent of Bitcoin investors come from China, including new investors pouring money from shares and P2P (peer to peer) sector, Du said.

With limited investment channels and a potential risk of a yuan depreciation, mainland investors are seeking new investment opportunities like Bitcoin, Du added.

Another factor fueling the Bitcoin price is the drop in supply in July, said industry officials including Du and Bobby Lee, CEO and co-founder of Shanghai-based Bitcoin trading platform BTC China.

Under Bitcoin rule, the daily “production capacity” of Bitcoin globally will cut by half in each of the next four years. Staring from July, the daily supply will be cut to 1,800 Bitcoins, down from 3,600 each day now.