One country dominates the global bitcoin market

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bitcoin atm

Reuters/Bobby Yip

Photographers take pictures in front of a mock bitcoin ATM during the opening of Hong Kong's first bitcoin retail store February 28, 2014.

Almost all bitcoin trading is done in China.

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The share of the cryptocurrency that's traded via China's mainland currency escalated over the past few years, overtaking the US dollar as the dominant currency. From less than a 10% share in January 2012, the yuan now makes up nearly 100% of all bitcoin trading.

Bitcoin surged 120% last year, outperforming every other currency in the world. It kicked off 2017 by rising above $1,000 for the first time since 2013.

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Those moves were made possible largely because of China.

Volumes of bitcoin trading increased as China's foreign reserves shrank, by about 8% to $3.05 trillion in 2016. Meanwhile, the yuan weakened against the dollar, hastening the rush of money out of the country and increasing interest in bitcoin.

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Last week, the cryptocurrency came under pressure after China announced it was investigating exchanges in Beijing and Shanghai on suspicion of market manipulation, money laundering, and other issues.

As of 8:34 a.m. ET on Wednesday, bitcoin traded down 4.8%, or $43, near $862 per coin. It jumped above $915 late Tuesday night but struggled to take out resistance in the $880/$920 area.

This chart shared by Deutsche Bank shows the staggering rise of China as the dominant trader of bitcoin:

Screen Shot 2017 01 18 at 8.59.57 AM

Deutsche Bank