Paste your Google Webmaster Tools verification code here

Bitcoin Price Corrects On PBOC Investor Warning

Posted by: : Paul EbelingPosted on: December 7, 2013 Bitcoin Price Corrects On PBOC Investor Warning

Bitcoin Price Corrects On PBOC Investor Warning


The price a Bitcoin, the digital currency, fell about 21% Friday to 877.46 on trading site Mt. Gox and has fallen more than 29% since closing at a record high at 1,237.96 Wednesday according to the data tracker

Much of Bitcoin’s parabolic rise in the past few months has been due to speculation by Chinese traders.

China’s central bank Thursday told  Chinese banks they could not use the untraceable digital currency, calling it “not a currency in the real meaning of the word.”

That does not mean Chinese investors cannot keep speculating in Bitcoin’s, but it is a set back for the credibility of the digital (virtual) currency.

Bitcoin was created about 4 yrs ago by an unknown hacker/hackers known as Satoshi Nakamoto, Bitcoin has the potential to be a long-lasting digital alternative to national currencies like the USD and the China’s RMB Yuan.

It has become favored for illicit uses such as money laundering and drug-dealing,  thus raising concerns about whether policy makers will ever embrace it fully as they have fiat (paper) money.

Regardless of Bitcoin’s long-term potential, there is little doubt its price has risen too far too fast: It traded for about 90 just 6 months ago and has to “snap back to the line” at some point.

An official for  BTC China, where a growing amount of trading takes place, said that most Chinese investors are just hoping prices will keep rising long enough for them to sell and turn a profit.

The People’s Bank of China (PBOC), in its statement  Thursday, reminded traders that might not be the best or soundest investment.

“The price can be easily controlled by speculators, creating severe turbulence and huge risks,” the PBOC reportedly said. “Ordinary investors who blindly follow the crowd can easily suffer major losses.”

This from the translation of the official PBOC ruling:

Financial institutions and payment institutions cannot develop Bitcoin-related services. At the present stage, financial institutions and payment institutions may not set a fixed price in Bitcoin for products or services, act as a central counterparty for trading Bitcoin, underwrite insurance related to Bitcoin, directly or indirectly provide other services related to bitcoin, including registration, transaction, clearing and settlement services, issuing Bitcoin-related financial services, or using Bitcoin in investment trusts and funds.

For the complete translated test of the PBOC ruling, go here:

This is an ongoing story, stay tuned…


Paul Ebeling


The following two tabs change content below.

Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.

Trade FX, Equities and Options with the World's Leading Platform , call our trade desk 631 482 0376, or contact us to get started.

Comments are closed.

Research 1 of 6

Recent News