Commodity Blog

What’s caused bitcoin prices to shoot up like a rocket to over $200 in the past week? The price briefly hit $205.50 at Mt. Gox and is still offered at $200, though other exchanges are mainly offering bitcoin between $180 and $190.

All clues are pointing to China. In a one-two punch combo which knocked out offers all the way up to and beyond $200, first the search giant Baidu, commonly referred to as the “Google of China” announced it would be accepting payments in bitcoin. Specifically, a subsidiary of Baidu, Jiasule (“Baidu Accelerated”), a cloud-based anti-DDOS service and content delivery network, has started to accept bitcoins for payment.

The Coindesk Bitcoin Price Index “BPI” is currently at $185.20.

Jon Matonis, the executive director of the Bitcoin Foundation, reports on Baidu’s decision at CoinDesk as “encouraging news”. As bitcoin reaches more than 60 countries beyond Mastercard, PayPal and VISA, he also noted: “I am confident that as more companies see the benefits of frictionless payments with low fees, immediate settlement, and zero chargebacks, they will want to accept bitcoin simply to remain competitive.”

Secondly, BTCChina, which is now the 3^rd largest bitcoin exchange worldwide, is widely reported to have doubled trading volumes in just the past week on the buzz surrounding Baidu’s big announcement.

Returning to a high last seen in April, when China also briefly overtook the U.S. in downloads of the Bitcoin QT software, BTC China has quickly caught up in volume to both Mt. Gox and Bitstamp.

CoinDesk reports BTCChina’s CEO, Bobby Lee, explains China’s enthusiasm for the digital currency catching on fire the past week: “For the first time in human history, bitcoin has allowed people to save and defer purchasing power, in a digital form. The Chinese people love this concept! It explains bitcoin’s fast adoption in China this year – 2013 has been a breakout year for bitcoin, and even more so in China.”