China Propels Bitcoin to All-Time Highs, But What’s the Price, $464 or $507?

Prices of bitcoin are at an all-time high today. But what's the price? $470, $485, $500? In the fragmented world

btc chinaDemand from China continues to be strong as prices of bitcoin are propelling to all-time highs over the weekend. As written in the past, leading Chinese exchange, BTC China, has gone from being a regional bitcoin trading powerhouse, to the world’s largest bitcoin exchange by market volume. As per bitcoinity statistics, over the past 24 hours, nearly 50% of exchange volume was conducted on BTC China, with MtGox and BitStamp lagging far behind at 18.55% and 15.05% of market share respectively. The volumes are reminiscent of where MtGox stood during bitcoin’s initial run-up of 2013 when MtGox was the major leader of trading.

Exchanging bitcoin only in Chinese yuan denomination, BTC China’s dominance is solely basedon on trading in their local currency, with BitStamp the current market share leader in US dollar denominated trading. With trading at BTC China solely based on yuan exchanges, the massive volumes represent just how important uptake in China has become, and its effects on prices on bitcoin.

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Although trading the same digital currency, the value isn’t the same across all exchanges as the market remains fragmented. As we hit all-time highs today, here are current bid prices among major exchanges at 13:05 BST

MtGox $501.20  (High: $507)
BTC China $486.30 (High $495.80) – ¥2961.66 and ¥3,019.78 respectively
BitStamp $466.20 (High $473.42)
BTC-e $462.60 (High $464)

MtGox has had the highest prices for several months now. This is due to delays in their processing of US dollar withdrawals. As a result, account owners with dollars in their accounts are paying a premium to buy bitcoins as they can more easily be transferred out of the exchange. Not surprisingly, dollar prices of bitcoins at BTC China are more expensive than BitStamp. Due to the current increase in demand for the cross-border currency, along with speculation from short term investors, there is a premium to buy bitcoins using yuan.

Other than the existence of a massive Chinese induced sell-off, prices at BTC China will most likely continue to at a premium as bitcoins provide a method to acquire other currencies. Nonetheless, as prices are below that of MtGox, it represents what many have known for quite a while, that the overall market is no longer using MtGox as a reference point for pricing. Due to market share from China, we can safely say that actual prices of bitcoins are somewhere in between BitStamp and BTC China; currently around $475, with the all-time high of about $490.

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