The market price of Bitcoin plummeted by rumors of regulation full blown by Chinese authorities

ByTyler Lowmiller

Virtual currency which has been increasing rapidly at a pace until it is horrible such as recording the highest value 100 times compared to the beginning of the yearBitcoin (bit coin)"Has been fluctuating since the beginning of December 2013. It seems there is regulation by the Chinese authorities in the background.

Bitcoin Falls 20% on PBOC Rumors, Chinese Exchanges Reinstate Fees - The Genesis Block
http://thegenesisblock.com/bitcoin-falls-20-pboc-rumors-chinese-exchanges-reinstate-fees/

Bitcoins Fail Currency Test in Scandinavia's Richest Nation - Bloomberg
http://www.bloomberg.com/news/2013-12-12/bitcoins-fail-real-money-test-in-scandinavia-s-wealthiest-nation.html

On December 5, 2013, the People's Bank of China, the central bank of China, issued a notice to financial institutions in China to prohibit financial services using bit coins. As of December 4, the trading quotation of bit coin was at the highest ever value of 1240 dollars (1 bit coin) per 1 BTC (about 128 thousand yen), but it showed a quick response to the regulation of the authorities and the market It plummeted, and on December 7 it became a situation of falling below 600 dollars (about 62,000 yen).

On December 6, the next day, Baidu's related service "jiasule" announced the cancellation of settlement with bit coin.


There are also rumors that the Chinese authorities will further strengthen the regulation in the future. On December 16, a rumor was written on a Chinese microblogging site on a Chinese website saying that "the management company of the bit coin exchange has been urged by the People's Bank of China to stop dealing with bit coins by the New Year New Year" The bit coin market fell by 30% when it did. Since then, there is no announcement from authorities and exchanges, although the credibility of this rumor is question marked, bit coin transactions in China are shifting to a smaller unnamed exchanges There are reports that it is progressing.

Until now, transactions of bit coins in China are cheap, so the bit coin trading rate on the Chinese Yuan Renminbi (CNY) basis is about 5% compared to the US dollar based trading marketpremiumWas occurring. This condition has not changed since December 5, when the People's Bank of China issued a notice, but since the decline on December 16, the CNY-based trading market is 10 compared to the USD based trading market %ofdiscountThere seems to be alarming against the Chinese government's strengthening of the bit coin regulation among market participants.

This is based on CNYBTC ChinaAnd based on USDBitstampGraph comparing trading quotations of. On December 16, the CNY-based trading market that had been premiumed until then is in a discounted state of about 10%.


The virtual currency bit coin has a big characteristic in that there is no centralized currency issuance authority body, but because of this feature, the response of each country government varies over its handling. Besides the Chinese government that clearly showed the policy of prohibition, it can be said that there are many negative countries in Europe for bit coins. For example, Norway, the wealthiest country in Scandinavia, decided not to accept bit coins as a formal currency. For this reason, the bit coin market has improvedCapital gainIf you do, tax will be imposed. In addition, a sales tax of 25% is expected to be applied to the bit coin distribution business in Norway.

Meanwhile, Paul Ellin, Associate Professor at BI Business School in Norway, is critical, "The Norwegian government's policy of not accepting bit coins as currency may be lacking in the foresight." According to Mr. Erin, "It is qualified as" currency "by itself if it is accepted by many people." However, Mr. Erin said, "If bit coins become more reliable and used for big shopping, we can compete with other currencies that are on the market, but still there We have not reached it. "