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Why China Will Send Bitcoins to $10,000

By MONEY MORNING STAFF REPORTS

Millions of Chinese are quietly dumping there gold and replacing it with a radical new digital currency called Bitcoin.

When you look at the numbers, it's almost surreal.

Before the Chinese surge, one Bitcoin was worth about $213. Then the Chinese barreled in -- and suddenly Bitcoin shot up near $1,000. That's for a single Bitcoin.

"The demand out of China has been staggering," Barry Silbert, founder and CEO of SecondMarket which owns the Bitcoin Investment Trust, told CNNMoney. "We're seeing the early signs of money coming into Bitcoin as an asset class."

But it's not just Chinese investors embracing Bitcoin mania. The government has gotten behind it and is encouraging its citizens to grab as much of it as they can.

Baidu, China's version of Google, announced it will accept payment in Bitcoins. And now the Chinese are buying homes, condos even entire office buildings with Bitcoins.

Editor's Note: What does China know about Bitcoins that has them so bullish? Go here to see what they've discovered.

Bitcoins have seen explosive growth in the U.S. as well.

Currently, 200,000 companies in the United States can pay their employees with it and 700,000 American businesses are turning to it, including Wal-Mart, CVS, Lowes, and NIKE.

In addition, 36 cities across 20 states allow residents to pay for everything from water bills to parking tickets with it. People are using it to pay for lunches and dinners at over 12,000 restaurants in 45 states.

As Bitcoins have grown widespread, prices have skyrocketed.

Last December the virtual currency traded at $20 and now trades above $900.

That's a 4,150% gain in less than one year.

But Bitcoins can be extremely volatile which begs the question: Can the profits continue?

One Silicon Valley tech guru has identified three Bitcoin triggers. This strategy allows investors to take advantage of Bitcoins' volatility and maximize gains. Click here to learn the secret to buying Bitcoins.

Tech expert, Michael Robinson, a Pulitzer-Prize nominated financial journalist and former Board Member of a major Silicon Valley Venture Capital Fund, has spent the past two years analyzing Bitcoins.

He says ordinary investors still have huge paydays ahead from Bitcoins.

"A lot of people mistakenly believe that they should be loading up on Bitcoin mining software," Robinson says. "This will cost them thousands and leave them forever trying to catch up to their initial investment."

He says future success will come from understanding the "how's and why's" of Bitcoins.

"You have to step back and look at all the pieces of a very big puzzle," he says. "Take our dollar. It's lost 96% of its value since 1913. The Australian Dollar it's lost 99% over that same time. The Canadian Dollar 95%. The British pound, down 99%."

"None of us are blind. Bitcoin is a global rebellion against the Fed, against all Central Banks," says Robinson. "Bitcoin is about control. With Bitcoins there's no sovereign credit risk."

"It's a stateless currency," Robinson adds. "There's no central bank, no central computer, no center to attack."

After talking to the CEOs of Bitcoin exchanges Robinson believes we are just getting into the first stage of the Bitcoin revolution.

"There is no other investment opportunity on the planet that offers this kind of potential," claims Robinson. "Bitcoins may be the ultimate, 21st century tax haven."

Robinson believes that we are at the tipping point of $1,000, $10,000, even $1,000,000 Bitcoins.

Bitcoins are an opportunity to spend a few hundred bucks...$500, maybe $1,000 and turn it into millions.

What that means is you shouldn't bet the farm on Bitcoin, because you don't need to.

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