At the end of last month, we noticed remarkable growth in data points surrounding bitcoin adoption in China. During May, China was the only country among the top 10 for most bitcoin client downloads of all time to see month-over-month download growth, taking the top spot for the May. Moreover, CNY as a percentage of total BTC exchange volume more than tripled since the beginning of 2013. Just a few weeks earlier we noted that China was almost dead even with the US for total nodes connected to the bitcoin network.
That growth trend tempered quickly in June.
Like so many other communities which rushed to adopt, China’s interest seems to have fallen precipitously. After seeing nearly 85,000 downloads in May, China is on pace for just 15,000 in June. While the number of downloads has decreased globally, China nearly tripled the average rate of decline across the rest of the top ten countries for most all-time bitcoin client downloads.
As mentioned above, the first two months of 2Q13 saw tremendous growth in Chinese presence on the bitcoin network. As of May 23, China had almost caught up to the US in total connected nodes, with 21% and 24% of the total network, respectively. As of June 24, China’s share of the global network fell sharply to 15%.
CNY trading as a percentage of total global exchange volume has remained relatively consistent with the end of May at around six percent. That said, trading volume tends to lag client download rate somewhat on the way up and presumably does so on the way down as well, meaning CNY’s share of total volume is likely to decrease over the coming weeks.
The reasons for the dramatic decline in bitcoin interest are unclear as of yet. Chinese citizens may be distracted by more fundamental financial concerns like recent equity market crash and looming fears of a credit crunch. Rumors of Chinese telecom companies blocking bitcoin related sites have circulated over the past weeks, but have largely been proven untrue.
Though China’s rate of adoption slowed dramatically so far in June, the rate of decline across the rest of the globe is beginning to level off – a strong signal that a trend reversal is on the horizon. Excluding China, the MoM average rate of decline in downloads in countries with the most all-time downloads roughly halved from 58% in May relative to 31% June.
Just in time for July 4th, the US crossed the one million download mark. That is not to say that one million Americans have downloaded the bitcoin client, particularly since this figure increases as existing users download new versions or add the bitcoin client to additional devices. Nonetheless, it’s quite a feat for a currency less than five years old.