While we can never say for sure who owns the majority of the 12 million or so bitcoins in existence, most experts believe a more-than sizable chunk are held by Chinese denizens. One thing we can say for sure is that there has been sharp decline in volume at BTC China, the country’s largest bitcoin marketplace, down 80 percent from its peak as government crackdown fears cut into trading.
The Chinese look to be souring on bitcoin, which has been quite detrimental to the digital coin’s price. The bad news for BTC China became bad news for BTC as a whole, which sent the price of BTC below $400 on April 10, representing bitcoin’s lowest price in 2014.
Chinese Investors Move in Packs
Last time bitcoin experienced a dramatic price drop was on news that China was banning bitcoin for usage by financial institutions. At that time the price of the volatile digital investment ran from an all-time high near $1,200 a coin to below $530 in just two weeks.
It is believed that the Chinese first began turning en masse to bitcoin as a wealth storage device capable of rapid appreciation sometime in October of 2013 when bitcoin began its rapid rise up the charts. The Chinese favor bitcoin because as their own currency is tightly controlled by the government and domestic non-paper currency assets, like real estate, are notoriously unstable.
However, Chinese investors tend to move in flocks. Unless the country was to suddenly, tacitly endorse bitcoin trading, the Chinese market looks to continue deflating.
China has previously said that its citizens could trade bitcoin at their own risk, calling it a "special virtual commodity." However, they've changed their tune substantially over the last couple months and have been reportedly shutting down exchanges and forcing investors to turn their bitcoin back into renminbi.
Bitcoin Nearly Halved this Year
To be sure, bitcoin doesn’t look to crash out completely anytime soon thanks to its fervent Western adherents, to say nothing of the early adopters sitting on small digital fortunes. But no matter how much bitcoin evangelists stick their head in the sand or try to spin bad news into positive, the market is clearly continuing a slow retreat on the cryptocurrency.
At the start of 2014, BTC was at $770 a coin. As of 3 PM EST it was trading at $396.15 a coin, representing a loss of 48.6 percent on the year.
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