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A conspicuous change in the yuan’s share of trading tells the story. On average, 97 percent of all bitcoin transactions between the end of July and Dec. 31 were performed in the Chinese currency. Last week, that number dropped to 63 percent; Wednesday’s 33 percent was the lowest since December 2013. 

With the East-West balance restored, the digital currency is settling into a range and looks set to start following normal supply and demand factors again. However, the sudden spike in December and subsequent rapid drop are raising questions about how free bitcoin — beloved of libertarians because it’s outside the clutches of any central authority — actually is.

It’s hard to prove that anyone is deliberately moving the currency, but equally it wouldn’t take much to do so. Even at the peak, when bitcoin had breached $1,000, there were only about 10,000 trades per minute. That suggests that it would take only $50 million to dominate the market for five minutes, which could be enough to create momentum. This shows how easy it can be to move the price (bitcoinity.org even keeps track of how many orders would be necessary to cause a shift). 

Bitcoin is a peer-to-peer system with transactions recorded on a public distributed ledger, so as well as being free from any central authority, it has no regulator. That means disgruntled investors have no one to go to, something that’s already been demonstrated by the demise of exchanges Bitfinex and Mount Gox. The closest thing to a supervisor ensuring the health of the market has been this month’s Chinese crackdown.

Libertarian bitcoin investors can breathe easy, then: A communist government has their backs.

Langner is a markets columnist for Bloomberg Gadfly. He previously covered corporate finance for Bloomberg News, and has written for Reuters/IFR, Forbes, the Wall Street Journal and Mergermarket. This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Speech