Bitcoin Tumbles After PBOC Rumors Confirmed

Zero Hedge ^ | 12/16/2013 | Tyler Durden

[Errant]

UPDATE: The earlier rumors have been confirmed: People’s Bank of China told more than 10 third-party payment service providers yesterday not to give clearing services to online Bitcoin exchanges, China Business News reports, citing a central bank meeting with the companies. This news is pressuring Bitcoin to $678 (on Mt.Gox) but more notably, BTC China rates imply a $588 equivalent price.

[Errant]

"Talk from the PBOC (via Sina) that "the central bank directs: third party payment institutions shall not undertake business with Bitcoin hosted sites," appears to be responsible for the slump in the virtual currency once again. This expands the PBOC's earlier Bitcoin ban to other institutions. Bitcoin prices have dropped over 20% from their overnight highs - trading at around $715 now. Perhaps even more notable is the relationship between Bitcoin and the precious metals today with the early Bitcoin weakness corresponding almost perfectly to gold and silver strength (and again mid-morning in the US)."

Looks like Bitcoin has finally gotten the attention of the central banks.

[DoughtyOne]

Trading 670.1 USD at the moment. I believe it was $20.00 lower an hour or so ago. Was at 850 earlier today. (I believe...)

[DoughtyOne]

http://preev.com/btc/usd

[Errant]

Then it still hasn’t fallen as far as the other day, when it dropped to $640 on Mt. Gox, also on China news. Back up to $710 now. We’ll know more about where it’s going to settle after Europe wakes up. I guess the Chinese aren’t as free as we or they thought they were. They seem to be jumping out of Bitcoin into PMs now.

[faithhopecharity]

nobody ever accused the Chinese bankers of stupidity

[Errant]

Also:

https://btc-e.com/exchange/btc_usd

https://www.mtgox.com/

[Errant]

Well, more than a few have been shot from time to time.

[Errant]

Meanwhile: Helsinki Unveils Europe's First Bitcoin ATM

Life goes on...

[Errant]

And: Swiss Propose Treating Bitcoin Like Any Other Foreign Currency

[DoughtyOne]

I’ll admit to thinking about buying a coin and holding on to it.

[bigbob]

Yeah, and maybe it’s just me because I don’t pretend to understand the Bitcoin, but it sure seems like a really great amusement park ride — until you discover there’s no one operating the controls. I can’t see how this will end well, but I may be wrong.

[Errant]

It's divisible by up to 8 digits, so you don't have to buy a whole Bitcoin and there is also Litecoin and Namecoin.

Lot of people are trading these crypto currencies like they were at the casino. I've traded stocks and commodities in the past and have learn there are easier and less stressful ways of making money.

I've found holding long term is the best way to invest in almost everything with few exceptions. One exception might be a changing climate for a particular investment. For example, there are rumors of 401K confiscation in the news.

[Errant]

There is always the fear of the unknown with something new like this and that helps drive the volatility. Then you have the lure of making a fast buck for some. I know some of those are having sleepless nights if they've guessed wrong. As a techie and investor, I enjoy watching this develop. It could wind up being something historic - or not. Time will tell. I've got a little skin in the game but not much. ;)

[Lurkina.n.Learnin]

That feller that supposedly threw the hard drive away that had millions of dollars of bitcoins on it. What happens to the bitcoins? Do they just disappear or can they be re-mined?

[Errant]

If he can’t find the drive or doesn’t have the numbers stored somewhere else, I’m afraid they are gone forever.

[Therapsid]

http://forums.silverstackers.com/topic-48032-uk-royal-mint-to-issue-gold-backed-physical-bitcoins.html

bit coin is backed by what?

[Lurkina.n.Learnin]

So out of the fixed number of coins there will be an attrition over time adding to their scarcity.

[catnipman]

“bit coin is backed by what?”

I think it’s backed by the same stuff that U.S. greenbacks are backed by. Still, I like money that can be held in your hand if you so choose, an attribute that almost all money has except for bitcoins.

[Errant]

Yes, and I imagine more than one would think. I know of another who says he has "misplaced" several thousand that he purchased about 2 years ago. At the time, it was only a few hundred dollars worth.

In the spring, the mining "difficulty level" was 10 million. It is going reach a mining difficulty level of 1 billion in the next few days. Many ASIC machines are coming online and that is creating some serious competition for the remaining Bitcoins. On the plus side, all of this trading has increase the payoff for miners as they also process transactions.

[Errant]

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