Bitcoin plunges as China investigates exchanges

January 12, 2017

Bitcoin prices plummeted after China's central bank announced it was investigating exchange platforms trading in the virtual currency.

The People's Bank of China (PBoC) said it had dispatched inspection teams to several of the country's major bitcoin trading platforms in Beijing and Shanghai.

The move, announced Wednesday, has triggered fears Beijing is mulling a crackdown on the digital unit as part of its widening battle against money flowing offshore.

The vast majority of the world's Bitcoin trading takes place in China, and prices surged above $1,100 early this month as investors flocked to the with the yuan hitting eight-year lows.

The PBoC announcement sent its value plunging, with the Bitcoin Price Index, an average of the major exchanges, dropping more than 15 percent to an intraday low of $752.11 on Wednesday.

On Thursday prices recovered slightly to $768.76, still far below its highs last week.

"China giveth and China taketh away," Gil Luria, an analyst at Wedbush Securities, told Bloomberg News.

"The rally in bitcoin over the preceding few weeks was likely driven by Chinese capital flight and speculation, which is why concerns about China taking a firmer stance against the use of bitcoin is likely putting pressure on the price."

The PBoC investigation was targeting foreign currency exchange, market manipulation, money laundering and financial security risks, the bank's statement said.

Explore further: Surging Bitcoin breaks through $1,000 barrier

Related Stories

China online marketplace Taobao to ban Bitcoins

January 8, 2014

China's largest online marketplace, Alibaba Group's Taobao, said Wednesday that it would ban the trading of Bitcoin and other virtual currencies from January 14, after a government crackdown on the units.

Vietnam says bitcoin transactions are illegal

February 28, 2014

(AP)—Vietnam's communist government said trading in bitcoin and other electronic currencies is illegal, and warned its citizens not to use or invest in them.

Recommended for you

WikiLeaks releases CIA hacks of Apple Mac computers

March 23, 2017

The Central Intelligence Agency is able to permanently infect an Apple Mac computer so that even reinstalling the operating system will not erase the bug, according to documents published Thursday by WikiLeaks.

Protecting web users' privacy

March 23, 2017

Most website visits these days entail a database query—to look up airline flights, for example, or to find the fastest driving route between two addresses.

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.