It's coming from China[1]. A LOT OF MONEY from China. Like $millions. That's how all these early adopters in the USA are being able to cash out millions and the price is not crashing.
They seem to like the fact it separates them from the US dollar, as well as allowing Chinese residents more control over their money and a potential store of wealth comparable to gold (although far more volatile).
Of course I still believe this is unsustainable, but in a strange form this is a wealth rebalancing act on a global scale... the rich Chinese giving money to the US citizens.
As long as the rest of the world doesn't go bitcoin mad and let the Chinese cash out again, then if it ever pops there will be a lot of wealth lost in China.
I'm more worried what the effect of the Chinese government potentially outlawing BitCoin would have.
Both China and the US government have given BitCoin a tacit (and not-so-tacit) endorsement, China with a pro-BitCoin documentary on state television, and the US with Senate hearings that appeared to suggest the US is not going to move to outlaw it but rather regulate it. I do not see the US government giving its citizens the impression that using BitCoin would be legitimate and then going back on that suggestion - there would be too many vested interests, with a lot to lose, and they would not be cool with that.
The Chinese government is more powerful than the US government, however. There is a chance that they could see their citizens pour their savings into BitCoin and still move for a regulatory crackdown. I'm still concerned that they will believe BitCoin is getting out of control and their ability to control the funds exiting and entering the country through BitCoin is diminished.
The bottom line: the more countries that start using BitCoin, that more stable it will become, the less a single country's regulatory action will impact the price.
They seem to like the fact it separates them from the US dollar, as well as allowing Chinese residents more control over their money and a potential store of wealth comparable to gold (although far more volatile).
Of course I still believe this is unsustainable, but in a strange form this is a wealth rebalancing act on a global scale... the rich Chinese giving money to the US citizens.
As long as the rest of the world doesn't go bitcoin mad and let the Chinese cash out again, then if it ever pops there will be a lot of wealth lost in China.
[1]http://www.bloomberg.com/news/2013-11-27/bitcoin-surges-to-1...