BEIJING: Bitcoin prices plummeted
after China's central bank announced it was investigating exchange platforms
trading in the virtual currency.
The People's Bank of China (PBoC)
said it had dispatched inspection teams to several of the country's major
bitcoin trading platforms in Beijing and Shanghai.
The move, announced Wednesday, has
triggered fears Beijing is mulling a crackdown on the digital unit as part of
its widening battle against money flowing offshore.
The vast majority of the world's
Bitcoin trading takes place in China, and prices surged above $1,100 early this
month as investors flocked to the virtual currency with the yuan hitting
eight-year lows.
The PBoC announcement sent its value
plunging, with the Bitcoin Price Index, an average of the major exchanges,
dropping more than 15 percent to an intraday low of $752.11 on Wednesday.
On Thursday prices recovered slightly
to $768.76, still far below its highs last week.
"China giveth and China taketh
away," Gil Luria, an analyst at Wedbush Securities, told Bloomberg News.
"The rally in bitcoin over the
preceding few weeks was likely driven by Chinese capital flight and
speculation, which is why concerns about China taking a firmer stance against
the use of bitcoin is likely putting pressure on the price."
The PBoC investigation was targeting
foreign currency exchange, market manipulation, money laundering and financial
security risks, the bank's statement said.
Copyright AFP (Agence France-Press),
2017
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