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If you've been betting on the bitcoin, this news will especially hurt. Value of the digital
currency dropped nearly 40 percent overnight, dipping to $455 from Tuesday's high of $750.
What's worse is the value has tanked by more than half since late November, when it was
listed at $1,200. (Via The Washington Post)
The value tanked following news that China's largest Bitcoin exchange would no longer accept
it. (Via NBC)
This comes two weeks after China's central bank banned financial institutions from trading
in bitcoin. It did so, it said, over concerns the virtual money could be used for money
laundering. (Via Bloomberg SaveFrom.net)
And while that called into question the future of Bitcoin, as The Guardian notes, Bitcoin
supporters argue a government banning Bitcoin doesn't mean much, as it's a decentralized
currency to begin with.
Then again, for a currency whose value isn't regulated by any country or banking institution,
the latest Bitcoin crash in China suggests the currency actually is pretty dependent
on government. (Via Clark Moody)
As Kashmir Hill at Forbes writes: "This shows that a country can effectively kill Bitcoin
within its borders. Bitcoin may be a stateless currency free of any country's control, but
it still needs an official nod from the powers that be to facilitate widespread use."
And while it's a setback for Bitcoin, some analysts say it's an even bigger loss for
China.
A writer at Quartz put it this way: "By shunning bitcoin, China ... may be passing up the chance
to leapfrog the rest of the world by fostering the growth of bitcoin-esque digital currencies
and the secure, efficient payments that they may enable."
The Bitcoin backlash in China comes about two weeks after a U.S. Senate committee noted
Bitcoin's potential benefits and declared it a legal means of exchange.