Gutsier Chinese people started buying up bitcoins not because they wanted to spend them, but because they’re an easily accessible alternative to holding yuan.
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As Bobby Lee, CEO of BTC China, told the Wall Street Journal, “the vast majority [of BTC China users] are buying bitcoin for investment purposes, hoping that prices will go up in the long term” (paywall).
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For instance, bitcoins are much easier to get ahold of in China than, say, shares of overseas-listed companies, foreign bonds or foreign currencies in quantities above $50,000. That’s because the Chinese government rigidly seals shut its capital account—something that won’t change any time soon.
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As has happened with many other theoretically tradable assets (e.g. tea, bad art, Q Coin, maybe worm grass fungus), once bitcoin entered the Chinese market, speculators piled on. And as more and more online trading platforms sprouted up in China, speculation went mainstream, in much the same way that gold speculation has throughout this year. In turn, the China Bitcoin Rush of 2013 probably fueled still more speculation from elsewhere on the planet.
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The government’s policy also hasn’t altered Chinese access to bitcoin trading. It neither forbade people from trading bitcoin nor banned trading platforms like BTC China.
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That’s probably simply because it can’t. While the government could in theory block trading platform URLs, it can’t stop people from circumventing the Great Firewall to trade online (provided the platform accepts yuan, which Hong Kong-based sites can).
