From the times today.....
http://www.thetimes.co.uk/edition/business/biggest-fall-in-bitcoin-blamed-on-the-chinese-r7qqphbwqBiggest fall in bitcoin blamed on the Chinese
The value of bitcoins, the cryptocurrency, created by technologists to circumvent state-backed paper money, suffered
the heaviest fall in its 23-year history Wow
Full article.....
Hailed as the great hope of libertarians around the world, the value of bitcoins, the cryptocurrency created by technologists to circumvent state-backed paper money, suffered the heaviest fall in its 23-year history.
Bitcoins fell by as much as 23 per cent yesterday, having hit a three-year high on Wednesday, as the digital currency’s value in dollars collapsed. Market watchers pointed to the rise in the Chinese renminbi as the likely culprit for the sell-off.
Bitcoins traded for as little as $885.41 on the BTC=BTSP exchange, having changed hands just a day earlier for a record $1,163. The electronic money has been regarded as the vanguard for a movement that wants to do away entirely with national currencies.
Chinese citizens are thought to be some of the largest buyers of bitcoins as they look for ways to circumvent strict rules on the money they can move out of China. As the renminbi has fallen in the past year, Chinese trading in bitcoins has risen. However, the sharp rise in the Chinese currency this week has seen the flow reversed. China is reported to be responsible for as much as 90 per cent of all trading in bitcoins.
“Long-term investors in bitcoin will be used to a degree of instability, with instability and illiquidity two of the major drawbacks of trading in the digital currency. Amid speculation that the Chinese are using bitcoins to navigate restrictions on foreign currency purchases, investors will hope this isn’t a precursor to Beijing implementing new controls on the purchase of cryptocurrencies,” Joshua Mahony, market analyst at IG, said.
The obvious attraction of bitcoins, which allow users to securely and anonymously move money around the world, is a cause for concern for Chinese officials who are attempting to keep a check on illegal capital flight.
Even with yesterday’s fall in the price of bitcoins, they have easily outperformed any other currency and are worth 50 per cent more than they were three months ago. “If something goes up very rapidly . . . people want to make a lot of money and at some point they’re going to want to sell in order to realise their gains,” Marco Streng, chief executive of Genesis Mining, a bitcoin mining and trading business, said.
The underlying blockchain technology behind bitcoins is one of the hottest areas in financial services at the moment and every leading banking group is working on ways to exploit the record-keeping system behind the currency.