Drop in Bitcoin Value
Bitcoin’s value dropped by 50 percent in one day, resulting from China’s halting its trade.
According to Mt.GoX’s, the world’s biggest trader of bitcoin, the value of 1 bitcoin at one point dropped as low as US$576 on December 7. This is nearly a 50 percent drop from before, when it was trading around US$1,000. December 8 saw a slight gain as 1 bitcoin climbed back to US$707.
The sudden drop of bitcoin came about as China’s biggest portal, Baidu, announced that it would stop trading in the virtual currency.
China’s central bank, the People’s Bank of China, had previously stated that it would allow trading between individuals but bar financial institutions from distributing and using the virtual money, warning that “there is a possibility that bitcoin would be used for money laundering.”
The Chinese government, which had been in favor of bitcoin, even broadcasting a special on bitcoin via the national network CCTV, decided against its further use due to recent price instability. Baidu’s decision to drop bitcoin reflected this concern, according to a company spokesperson.
Bitcoin, a virtual coin created in 2009 by Japan’s Nakamoto Satoshi, saw its value skyrocket this year, thanks to a restriction on the amount of issue and circulation. Its value was as low as US$20 early this year, then recently jumped up to reach beyond the US$1,000 mark.