Investing.com - The price of virtual currency Bitcoin plunged nearly 10% on Tuesday, after China’s central bank said it was cracking down on transactions made using the currency.
BTC/USD fell 7.1% during U.S. morning hours to trade at USD716.38 on the world’s largest Bitcoin exchange, the Tokyo based Mt. Gox. The currency tumbled by as much as 10.5% earlier in the day to hit a session low of USD678.90.
The People’s Bank of China banned third-party payment service providers from offering clearing services to online Bitcoin exchanges. Companies currently offering services must halt services by the Chinese New Year, a weeklong holiday that begins on January 31.
The PBOC recently said that Bitcoin did not qualify as a currency and lacked legal protections and that financial institutions and payment systems were not allowed to take deposits from Bitcoin-related businesses.
Rising demand from China has seen the country become the largest Bitcoin market in recent months, as buyers seek to profit from speculating in the currency.
Bitcoin is digital cash for the internet and it is not backed by a government or central bank to regulate or issue it. It can be used to purchase goods and services from an increasing number of stores and online retailers.
Bitcoin rose to an all-time high of USD1,241.10 on November 29. It was trading at USD100 in early October.
BTC/USD fell 7.1% during U.S. morning hours to trade at USD716.38 on the world’s largest Bitcoin exchange, the Tokyo based Mt. Gox. The currency tumbled by as much as 10.5% earlier in the day to hit a session low of USD678.90.
The People’s Bank of China banned third-party payment service providers from offering clearing services to online Bitcoin exchanges. Companies currently offering services must halt services by the Chinese New Year, a weeklong holiday that begins on January 31.
The PBOC recently said that Bitcoin did not qualify as a currency and lacked legal protections and that financial institutions and payment systems were not allowed to take deposits from Bitcoin-related businesses.
Rising demand from China has seen the country become the largest Bitcoin market in recent months, as buyers seek to profit from speculating in the currency.
Bitcoin is digital cash for the internet and it is not backed by a government or central bank to regulate or issue it. It can be used to purchase goods and services from an increasing number of stores and online retailers.
Bitcoin rose to an all-time high of USD1,241.10 on November 29. It was trading at USD100 in early October.