As of this writing, Bitcoin topped out at $233 on the Mt. Gox exchange October 23.
The air is getting thin in the bitcoin market as the crypto-currency has climbed nearly 52 percent in value over the last 10 days, currently trading around $204. The period has seen a tangled web of good, bad, and uncertain news, including the shuttering of its largest commerce channel, an endorsement by a global technology powerhouse, and unpredictability in the global macroeconomic environment.
So what’s behind the spike? And where might we expect the market to go from here?
Equally powerful has been the decision by Chinese Internet giant Baidu (aka, “the Google of China”) to begin accepting bitcoin payments for select products and services – a move that brings it in step with WordPress, Reddit, and OkCupid, among other established online businesses. The Chinese government has also been campaigning in recent months to see the dollar removed from global reserve status, stoking the fire of possible instability in the value of the US currency. Baidu is not likely to represent a major channel of bitcoin commerce in the near term, but the tacit endorsement of the currency appears to be a major boon for investor confidence. A few weeks earlier, BTC China – the third most active bitcoin exchange by volume – became the first major bitcoin exchange to eliminate its trading commissions, at least temporarily.
The compound effect of these recent moves is that China has seen an increase in bitcoin activity and would appear to be contributing to the latest price gain. Uncertainty around bitcoin regulation in China may eventually dampen this enthusiasm, but in the near term, it shows no signs of abating.