Bitcoin Value Slumps in Light of Chinese Mistrust

 Bitcoin Value Slumps in Light of Chinese Mistrust

The price of a Bitcoin dropped on Wednesday after regulators took steps to restrict its usage.

Bitcoins were trading on Wednesday at less than half their value at the end of November after Chinese authorities took steps to restrict Bitcoin transactions. According to USA TODAY, the currency lost more than half its value since the end of November.

It is not news that China has not taken well to the popularity of Bitcoin. The Chinese government has been open regarding their mistrust for the virtual currency. On Wednesday, BTC China, the country’s largest Bitcoin exchange, said it had been told to stop accepting deposits in Chinese currency. This came as the latest in China’s attempts to restrict the use of Bitcoin. Earlier this month the country’s IT Ministry and financial watchdogs officially banned Chinese banks from dealing in Bitcoin transactions. China is most concerned with the lack of control under which Bitcoin trade operates.

Now, the drop in trading price of a single Bitcoin has been directly attributed to the Chinese for their reluctance to trade with the virtual currency. Chinese perceptions of Bitcoin have been greatly influenced by online crime such as fraud and hence that country has refused to recognise Bitcoin as a valid currency. Furthermore, the trade of Bitcoin is said to interfere with Chinese monetary policy operation.

Investors and individuals who buy and trade in Bitcoins do so via exchanges. If such exchanges are eliminated due to a ban on Bitcoin, it is unlikely that their deposits will be refunded.


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