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Bitcoin prices climbed back over $1,000 yesterday (Monday), less than two weeks after the virtual currency crashed below $500.
The jump in Bitcoin prices was sparked by news that social game operator Zynga Inc. (Nasdaq: ZNGA) will now be accepting the virtual currency.
In a match made in Internet Heaven, those playing Farmville 2, CastleVille, ChefVille, CoasterVille, Hidden Chronicles, Hidden Shadows, and CityVille will be able to exchange Bitcoin for in-game purchases.
Zynga announced that it will be using the Bitcoin exchange BitPay to handle its transactions. Through BitPay, Zynga will be able to immediately take payments received in Bitcoin and convert them to a more traditional currency. That conversion eliminates fluctuation risk for merchants.
Bitcoin's volatility, which has become a hallmark of the virtual currency, has been on full display in the last several months. At the end of November, it reached its highest price to date of more than $1,216 on the Mt. Gox exchange.
It didn't stay there long. The currency crashed below $500 following a Dec. 18 announcement from BTC China (the world's largest Bitcoin exchange by volume at the time) that it would no longer be accepting Chinese yuan deposits. That decision came several weeks after the Chinese government banned financial institutions from trading in Bitcoin.
That wasn't the only negative story for Bitcoin in the last month, however.
Just this week, Taiwan's Financial Supervisory Commission (FSC) announced that it will not allow Bitcoin ATMs in the country. The FSC rejects Bitcoin as a currency and doesn't believe it should be accepted as payment by any bank or individual.
But even that negative news couldn't keep the price of Bitcoin from surging. Since dropping below the $500 mark in December, the virtual currency's value has risen quickly. By Dec. 26, the cryptocurrency was back over $800, and it has continued upward since.
Bitcoin was priced at $975.94 at the time of this writing.