First of all, it’s not just a matter of buying bitcoin. China is the largest miner of bitcoin. This happened because of mix of factors such as the fact that you have a huge electronics industry in Shenzhen, as well as highly subsidized power. Once you produce bitcoin in large numbers then you need a huge industry to process it.
Second, a lot of it has to do just with the fact that there are so many Chinese people. Bitcoin is a very, very minor part of the Chinese economy, and the fraction of Chinese that have anything to do with bitcoin is smail. However, a small fraction of a billion people and a multi-trillion dollar economy is huge.
The Chinese government has been tolerant of crazy investment stuff, because if you lose money in bitcoin, it’s not the government’s problem. Also bitcoin isn’t nearly large enough to bring down the Chinese economy (like for example P2P lending) so they haven’t put a huge amount of regulation on it.
Third, the reason really changes from month to month. Earlier in the year, there was a spike in bitcoin prices as people were trying to find ways of moving money out of China. That disappeared, and right now the big spike was because ethereum was hot, and so there was a herd mentality.
The cool thing is that things really change from week to week or even from day to day. For example, after the international banks closed off settlement between different bank accounts, there was a mad scramble for alternative settlement routes which meant that a flood of bitcoin started to move through HK.
Also one reason that bitcoin isn’t used is to hide money from the Chinese government. It turns out that bitcoin is extremely traceable, so if you move money with bitcoin, the Chinese government can pretty easily find you. The fact that it’s really hard to use bitcoin for corrupt purposes is why the Chinese government has been encouraging its use.
I was asking same question one day. transaction details are traceable not the person's identity, so how can they stop illegal transaction ?
The connection to the human identity is always possible, don't worry. Crypto and blockchain is a government inception to reset the debt situation of this world. Everything is traceable. Cash is far better than crypto.