A Brief Look at Bitcoin Market in China

Recently we saw more Chinese joined Bitcoin market, selling mining tools, establishing exchanges, or creating new services.

Bitcoin Mining

ASICMINER and Avalon are developing chips for Bitcoin miners. ASICMINER is owned by Bitfountain company who sell shares and share Bitcoins mined with all the shareholders. As it needs miners itself, it’s very hard for outsiders to purchase miners or chips by ASICMINER.

Avalon only develops and sell chips. The company claims they’d ship chips nine to ten weeks after receiving orders. But consumers have to pre-order and can hardly know when exactly they’ll receive their chips.

Digco.in, not capable of developing miners though, does the similar thing with ASICMINER, collecting money from shareholders to purchase miners and share Bitcoins with them.

ASICME, founded by a co-founder of Renren, makes miners with Avalon chips and sell them. It plans to adopt ASICMINER model too to attract investments from audiences who’d like to earn some Bitcoins but don’t bother to by and run miners.

Bitcoin exchanges

Bitcoin exchanges in China support, apart from online banking services, Alipay, an escrow payments service that Chinese trust. Some also set up stores on Taobao, also powered by Alipay, to sell Bitcoins directly.

From charts on BTCChina you can see Bitcoins are traded at lower prices then on MtGox, currently the largest Bitcoin exchange world wide.

Those platforms takes a 0.3% – 0.5% transaction-based fee and extra fees for depositing CNY or cashing out BTCs into CNY.

Volumes traded on those platforms every day isn’t big. There’s only a dozen trades every day on 42BTC, an exchange that went live in March this year.

BTCChina has been around for two years, starting as a virtual currency company.  OKCoin was founded by a bunch of former employees from Google, Baidu and Alibaba and was launched in early 2013. It received one million US dollars in seed funding. 42BTC is founded by a veteran engineer who previously built small businesses from online publishing platform to server-sharing service.

ewmarket is a market under beta testing for users to trade goods or services with Bitcoin. It’s unknown whether such a market is needed as some Taobao retailers have already accepted Bitcoins. Some developers have created plugins to automatically convert prices in CNY of goods on e-commerce sites into BTC.

Litecoin is the next one Chinese people who are interested in virtual currency or simply want to speculate.