One of the tools that I use to watch what’s happening in Bitcoinland is a site called fiatleak.com. It shows a graphical representation where in the world people are buying bitcoins, or actually what currency they are using to buy them. I let it run for a couple of hours tonight and it’s clear that China is the main buyer right now: out of the 27,000 BTC that were traded 24,000 were bought using Chinese Yuan!
Of course it’s daytime in China and a Sunday night in the US, but this is still a remarkable difference and it clearly shows which country is purchasing all the bitcoins. Now the question is whether it’s the government or local Chinese who are buying, I would not be surprised if it turns out to be both.