Bitcoin prices soar again, driven by Baidu and China

Latest batch of Bitcoin investors are Chinese players triggered by Baidu’s decision to accept Bitcoin payments.

Apparently the more news about Bitcoin, the better for the digital currency.

We all remember the astronomic rise in Bitcoin prices that we observed back in March/April thanks in large to the mainstream media spelling out the name “Bitcoin” here and there almost every day. The more they talked about it, the more important and expensive it became.

It seems as if the news of an FBI raid back in October on black market marketer Silk Road only worked in favor for the digital currency as it has not only recovered, but is actually trading today more than 85% higher (see chart below). The slump in the price has attracted new investors, the freshest batch allegedly coming from China.

Last week the 5th most popular website in the world – Chinese search engine Baidu (NASDAQ:BIDU) has announced that it is going to accept Bitcoin payments for its security division Jiasule, which offers protection from DDoS attacks and cloud services. The legalization stamp from a Chinese company was apparently the nail in the coffin on Bitcoin bears, as the price has soared since this announcement. The Chinese public is a conservative crowd, but the announcement by the Chinese biggest search engine operator has put a gold luster on the digital currency.

Bitcoin price chart, Bitcoin price, trade Bitcoin, Bitcoin China, Bitcoin Silk Road

Bitcoin one month price chart. Source: Bitstamp.

Needless to say the Chinese public has had vast experience with inflation. As the country has a very high savings rate, any new alternative to Gold hoarding (that has not been the most profitable strategy for the past year) is more than welcome to diversify some savings in. While the price rise is becoming hectic and vaguely reminds us of the crazy bull run from March/April of this year it is worth to point out that some brokers have been quite forward looking and are already offering Bitcoin trading on their platforms. Plus500 was the first of the CFD brokers, followed by AvaTrade. As the popularity of the alternative to fiat currencies rises we are quite sure that more brokers will follow.

Binary options and spreadbetting providers have also been keen in providing Bitcoin trading with IG, Anyoption and Traderush being the pioneers. We have also bumped into a rather different binary options provider that accepts only Bitcoins for making up or down bets. At Satoshi Option one can place a bet without actually opening an account. All a Bitcoin trader has to do is to send the bitcoin amount one would like to invest to the appropriate bitcoin address presented on the Satoshi Option website. The addresses are different for every pair and side (up or down) so the provider can actively distinguish when the bet has been placed and which side is it on. This also brings more transparency to the bet as there is no argument when it has occurred – the Bitcoin wallet will flawlessly state when that happened. So far the website is offering only 60 seconds trading, but new products are expected soon.

As far as the Silk Road induced slump is concerned – Bitcoin investors do not really care. The only hurdle that can challenge the digital currency now is a regulatory war. There is no doubt that lobbyists are going to be pushing hard against Bitcoin, as the disruptive potential of this technology is rather substantial and the monopoly that it is going to fight is the government itself. Brave Bitcoin investors do not care – it appears there are plenty and they are in for the long run.

For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.

Read Also: