Bitcoin prices plunged this week on reports that the People's Bank of China (PBOC) was planning to block banks from providing accounts to Bitcoin-based businesses.
The CoinDesk Bitcoin Price Index dropped from about $585 on Wednesday to as low as $477 on Thursday, though by Friday Bitcoin prices were hovering around the $500 level.
The report came from Caixin Online, a mainstream Chinese news outlet, and quickly spread through the Bitcoin community. Caixin said it had seen the PBOC documents that would shut down the accounts of 15 specific websites by April 15.
The odd part of this piece of Bitcoin news is that the PBOC has made no announcement publicly of this change in policy. According to The Wall Street Journal, that's not unusual. China's central bank sometimes enacts policies quietly to make it easier to change them later.
Such a cautious approach makes particular sense with Bitcoin regulations; virtually every government on the planet is struggling to figure out how they should deal with the digital currency.
Long term, however, China will find that it won't be so easy to shun Bitcoin; within the next few years, "the Internet of Money" will be much more integrated into the global economy.
Note: The world's reserve currency isn't going anywhere, but it's about to be worth a whole lot less. Here's why the end of the dollar isn't the end of the world...
Quick Bitcoin Hits
- Bitcoin Believers: SecondMarket Chief Executive Officer Barry Silbert met with 38 institutional investors at the Barclays Emerging Payments Forum this week. For such a conservative group, a fairly large number are already "Bitcoin believers." Silbert told CoinDesk: "Of all the folks that I met with, 21% were skeptical, 15% were believers. The rest - 64% - were still learning."
- Wal-Mart Gyft Cards: San Francisco-based Gyft, a company that works with merchants to supply Bitcoin gift cards, added mega-retailer Wal-Mart, Inc. (NYSE: WMT) to its roster this week. Shoppers can use the Gyft Bitcoin cards at all of Wal-Mart's 11,000 locations in 27 countries.
- Buffett Doesn't Get It: When asked at the CoinSummit to react to Warren Buffett's assessment of Bitcoin as a "mirage," venture capitalist Marc Andreessen let loose this broadside: "The historical track record of old white men crapping on new technology they don't understand is at, I think, 100%." Ouch.
More Bitcoin, in Case You Missed It
Other Bitcoin news Money Morning has reported on this week:
- The IRS finally released its guidance on how Bitcoin should be treated for tax purposes - and it's going to be a nightmare.
- Buying Bitcoin will get a whole lot easier when there's a Bitcoin ATM on every corner.
- Believe it or not, someone is trying to set up the world's first Bitcoin-based derivative.
Tech investors took note when Intel bought smart wristband maker Basis Science for $100 million. It's clear that Intel is focused on being a leader in wearable tech, but it has also zeroed in on the one segment of wearable tech that will prove to be the most profitable...
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.