Question: What do indium and Bitcoin have in common?
Answer: Prices for both are being driven by speculative buying in China.
While indium prices may not be up 1000 percent over the past six months, they have risen 30 percent since April, a remarkable run considering that many still believe the market is in oversupply.
The correlation between Bitcoin and indium prices may be explained by the suppressed investment environment in China.
In a country flush with cash, where capital controls restrict overseas investment and the government sets interest rates below the rate of inflation, individuals are desperately searching for alternative investment opportunities. The Fanya Metal Exchange and Bitcoin are just two opportunities, among many, that have moved into this void and been sold to investors not knowing where else to put their renminbi.