Mt Gox exchange shutdown sparks Chinese bitcoin gold rush

Chinese investors rushed to buy bitcoin, seeing it as potentially undervalued, after the value of the virtual currency fell following the shutdown of the Mt Gox bitcoin exchange this week.

Since Tuesday, more than 30,000 bitcoins have changed hands in China. That's four times the usual trade volume, and compares with just 300 exchanged in the United States.

Bobby Lee, chief executive of one of mainland China's biggest exchanges, BTC China, said: "Much more bitcoin is flowing around the system in China."

Hao Hong, managing director and chief China strategist at Bank of Communications, said: "I think people are trying to trade the market, but with one of the largest exchanges closed, it will be a little difficult to cash in even if there's a technical rebound."

It marks a strong return to the market for Chinese investors after the People's Bank of China moved to cool interest in bitcoin, the value of which peaked at US$1,120 last year.

Watch:Buyer protests in front of a Japanese bitcoin trading company