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This week in bitcoin: Price falls amid Chinese regulation crackdown rumors

In this week’s bitcoin review, we recap how Chinese regulation rumors are causing the price to fall.

Is anyone to blame for the price downslide?

Rumors continue to swirl that China is starting to crack down on bitcoin trading by freezing some bitcoin exchange’s bank accounts. In an announcement posted on its site yesterday, BTC Trade said that it had received notice from its bank that its account would be frozen on April 15 if it does not stop using it to conduct bitcoin-related business. Chinese exchanges Huobi and BTC100 also posted notices that they had received similar calls about their bank accounts. At the same time of the announcements, the price of bitcoin took a huge tumble, falling nearly 18 percent in one day.

The market then rebounded when the governor of the People’s Bank of China said during an economic conference that it was out of the question for the bank to ban bitcoin, because they didn’t create it. Instead, according to the reports, he viewed it as more of an asset or a collectible, like stamps. While that did help fix some uncertainty in the market, it wouldn’t be out of the question for the price to see a couple more free falls if more Chinese exchanges are faced with the threat of frozen bank accounts.

The market this week

In a scary moment for bitcoin holders, the price dipped below $400 on Thursday and fell 18 percent to close at $360.84. It has since made a major rebound and is up 17 percent to $425 as of 10:45 a.m. PST.
For background on why we’re using Coindesk’s Bitcoin Price Index, see note at bottom of the post. 

In other news we covered this week:

  • The MtGox drama continues as its CEO, Mark Karpeles, is likely to face arrest in the U.S. from its legal problems should he set foot on U.S. soil.
  • Circle’s CEO thinks the future of bitcoin will be determined by central banks, standards bodies and corporate contributors — not quite the decentralized system of the early dreamers of bitcoin.
  • Bitcoin continues its consumer-friendly approach after Cryptex announces a bitcoin-to-cash debit and ATM card.

Here are some of the best reads from around the web this week:

  • Ezra Klein’s new Vox Media got into the bitcoin game right away. It published its first piece on why bitcoin is a bad currency that will change the world along with 19 “cards” that explain in laymen’s terms what the currency is.
  • A New York Times reporter wrote about his bitcoin befuddlement and his process in trying to understand it: “The first thing I found out? This is the closest thing in finance to riding an angry bull at the rodeo.”
  • The largest bitcoin “mine” in North America looks more like a greenhouse than a traditional mine and its on the outskirts of a small town in central Washington.
  • Bitcoin also goes to Washington — D.C., this time. Robocoin brought an ATM to Capitol Hill then taught congressmen how to buy cryptocurrency.
  • Bitcoin is also headed to the classroom. NYU announced it will offer a class this fall on the legal and financial issues around the crpytocurrency world — that is if it still exists in the fall.

Bitcoin in 2014

The history of bitcoin’s price

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A note on our data: We use CoinDesk’s Bitcoin Price Index to obtain both a historical and current reflection of the Bitcoin market. The BPI is an average of the three Bitcoin exchanges which meet their criteria: Bitstamp, BTC-e and Bitfinex. To see the criteria for inclusion or for price updates by the minute, visit CoinDesk. Since the market never closes, the “closing price” as noted in the graphics is based on end of day Greenwich Mean Time (GMT) or British Summer Time (BST). 

Featured image from Flickr/BTC keychain

2 Responses to “This week in bitcoin: Price falls amid Chinese regulation crackdown rumors”

  1. Neil Schuster

    What about the BitPay funding (about $30 million) on Friday? That’s a serious amount of money for the company helping enterprises and small business accept bitcoin as a form of payment from customers.