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BitCoin Crashes 50% After China Stops Banks from Handling It

In a couple days, the Bitcoin price at Mt. Gox, a large Bitcoin site, crashed from $1,200 to less than $600, recovering marginally to $750 today.

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China has banned financial institutions from handling Bitcoin transactions, says Bloomberg:

The People’s Bank of China said financial institutions and payment companies can’t give pricing in Bitcoin, buy and sell the virtual currency or insure Bitcoin-linked products, according to a statement on the central bank’s website.

This volatility can kill a small trader. However, the bubble is still out there.

Also read: The Bitcoinundrum: To Buy or Not to Buy?

  • Nitin says:

    Just adding:
    The PBC and four other agencies issued a joint notice.
    1) for the purpose of Chinese law, bitcoin is considered a virtual commodity and not a currency
    2) banks and other regulated financial institutions are forbidden from conducting bitcoin services (i.e. a bank can’t trade bitcoin)
    3) anyone else may trade bitcoin under the condition that 1) any internet site obey the standard internet rules (i.e. censorship) and that 2) sites collect the real identity of bitcoin traders to enforce anti-money laundering laws.

  • This is obvious. Governments do not like currencies they cannot regulate or track. I mean no one even knows who the creator of Bitcoin is, sure his online identity is known yet …. could this be an NSA ploy????
    I expect more governments to come out and do the same. Each currency from a central bank is that central banks promise to pay, who exactly guarentees that for bitcoin?

  • prasadbhagwat says:

    sir who apart from the owner, who is the direct beneficiary from the mining of new bit coins ?? i.e any one gets some benefit ( of course apart from the owner of the same ) form it ??