Bitcoin plummets (~50%) as China's largest exchange blocks new deposits

The price of bitcoin has plummeted following an announcement from China's largest bitcoin exchange that it would no longer be accepting new yuan deposits.

BTC China said that due to action by a third-party payment provider, YeePay, it could no longer accept deposits in the Chinese currency, although it would still be able to process withdrawals. BTC's chief executive, Bobby Lee, said that YeePay gave notice on Wednesday morning Shanghai time that it would no longer provide services.

Lee blamed government regulation for the decision. China's central bank warned in early December that bitcoin was not legally protected and had no "real meaning", and barred financial institutions from using the currency.

On Tuesday, the central bank extended that ban to payment companies like YeePay, and gave them until Chinese New Year, which begins on 31 January, to comply.

At publication time, the value of one bitcoin on BTC China stands at ¥2,630 (£266.02), down from a high of ¥7,395 (£741.70) in late November. Bitcoin has dropped against other currencies in the same period, falling from £750 to £300 in the UK and from $1242 to $480 in the US.

On 18 November, BTC China raised $5m in a funding round from institutional investors Lightspeed. Until then, it had been self-funded by its three co-founders, who opened the site in June 2011.

Bitcoin remains legal to use in China, and the central bank is standing by an announcement that individuals are free to trade it at their own risk. But without third party payment providers, new purchases of the currency are virtually impossible.

That raises doubts about the future of bitcoin. The large boom in value that the currency has seen this autumn is widely thought to be a result of Chinese users adopting it. As Chinese support has since waned, so too has the price.

Bitcoin's supporters have consistently argued that the currency is impossible to fully ban, since it exists as a decentralised network of transactions. But if it can be rendered useless to merchants and customers, an actual ban may be unnecessary.

Teah .....China was gonna pull de Plug .

I really wanted to see how far it could go.

and actually get PEG to international currency exchange:

WITHOUT a central bank !

oh well  * sigh *

i think the people that are really behind BTC are ok with it. china caused the bubble. the whole point is for BTC to be independent of a centralized bank. it will bounce back up to ~250 where it belongs.

It's funny, you hear all of these people talking about how it's going to be 5000$ or whatever in January, then this happens, and then it will rise and fall again, and China is laughing their butts off.


The truth it, it's a volatile, unstable "currency" that you shouldn't trust your hard-earned money on. It's like gambling.