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Once again the bitcoin community has been dizzy due to the significant price increase, the following correction, and rumors of China. After the sharp price rally, the discussion has turned to the Chinese central bank warning about the volatile cryptocurrency bitcoin.
Rumors From China Once Again Stir the Crowd
Here’s what we know. The price of everyone’s favorite digital asset had dramatically risen in value at the beginning of the year reaching roughly $1,145 USD per bitcoin. The day after this substantial gain, bitcoin took a significant dive shaving over $300 off the price. The sudden drop was unexpected to some as the cryptocurrency’s crossover to the 4-digit range didn’t last long. Speculators wondered where the bearish decline was stemming from blaming miners selling off at the end of the year, to those who held for over three years to gain back what they once lost.
However, the uncertainty once again turned to China as many started to speculate the price drop derived from that region. The bitcoin community and mainstream media heard reports of China’s central bank warning about bitcoin. According to the regional publication 8BTC.com, the People’s Bank of China (PBOC) explained Chinese exchanges should conduct a self examination of their operations.
“The recent Bitcoin Price is highly volatile,” explains the PBOC. “To prevent risks and uphold financial stability, PBOC Shanghai and Financial Office of Beijing have jointly met the major heads of OKcoin and Huobi to know the current status of Bitcoin trading. We have reminded them of possible risks and require it operate strictly in accordance with laws and regulations of China. We have urged the two exchanges to conduct self-examination based on related laws and correct, if any, possible irregularities.”
BTCC Exchange Says Bitcoin is Not Banned in China
After roughly six hours of media reporting that China was banning bitcoin again, statements came out from the Chinese exchange BTCC. The exchange explains that bitcoin is not at all banned in the country and the warning was business as usual. BTCC founder Bobby Lee details:
BTCC regularly meets with the People’s Bank of China and we work closely with them to ensure that we are operating in accordance with the laws and regulations of China.
Furthermore, Lee explains that the bank was warning about the volatility of the cryptocurrency just as it had in 2013. Back in 2013, there were swathes of headlines stating the PBOC was going to ban bitcoin when in fact the bank was merely warning the country’s investors. Lee says that “bitcoin is a virtual good and doesn’t have legal tender status,” and all users should be aware of the risks of volatile trading.
Ok, in all seriousness, I spoke to a relative in China and he says it’s not any meaningful news. Just PBOC FUD. So China has not banned BTC! https://t.co/mzHgq3ZxrD
— Charlie Lee (@SatoshiLite) January 6, 2017
Price Dizziness and Cheap Bitcoin
As soon as the bitcoin community started hearing these stories, some believed it but most shrugged it off. Many of them laughing over the internet and posting their favorite China bans bitcoin memes. Others have been speculating that these rumors stem from people wanting to shake up the markets for cheap bitcoins.
Bitcoin is not banned in China and bitcoin is significantly cheaper than it was a few days ago. This is what we know, and everything else has been a mixture of price dizziness, fear, uncertainty, and doubt.
What do you think about the recent events with China and bitcoin’s price movements over the past few days? Do you think the two topics are correlated? Let us know in the comments below.
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