The price of bitcoin has plummeted by 50 percent since record highs in late November, with selling accelerating on Wednesday after reports that the People’s Bank of China (PBoC) has ordered third-party payment providers to stop using the virtual currency.
The price of a bitcoin fell to below $600 after stabilizing near $800 for the last couple of weeks after a price slump from $1,200 in late November. At 8 a.m. London time on Wednesday the currency was trading at $555 on major exchange Mt Gox and $550 on CoinDesk’s index, which measures a basket of prices around the world.
China’s central bank has ordered third-party payment agencies – which provide clearing services for bitcoin exchanges – to stop any “custody, trading and other services” related to the virtual currency, according to a report Tuesday byYicai.com. The Chinese website – which is affiliated with the China Business Network TV station – added that platforms were told to end working relationships with virtual currency exchanges before Chinese New Year which commences at the end of January.
Zhou Jinhuang, the deputy director of payment clearance at the People’s Bank of China is reported to have chaired the closed-door meeting on Monday when more than 10 third-party payment platforms were given the news. Attendees included a representative from Alipay, which is China’s leading third-party online payment solution, according to its website.
BTC China, the world’s largest bitcoin exchange, according to Bitcoinity.org, stopped accepting deposits in Chinese yuan on Wednesday due to the clampdown. Bobby Lee, the CEO of BTC China told CNBC that he had received notice from his third-party payment processor on Wednesday.
“They essentially have cut us off from allowing customer deposits into BTC China’s bitcoin exchange,” he said. “Customers don’t have to worry, the deposits are still here, the withdrawals will still be allowed. So there’s no need to panic on that.”
Lee added that he believes the recent clampdown is not due to government officials in the country fearing that bitcoin is helping customers to move yuan out of China. “Bitcoin exchanges are legal…so our business model is still valid but we’re under some pressure in terms of being able to work with third-party payment companies. So we’re looking for alternatives,” he said.
Who owns the single largest Bitcoin wallet on the internet? The U.S. government.
In September, the FBI shut down the Silk Road online drug marketplace, and it started seizing bitcoins belonging to the Dread Pirate Roberts — the operator of the illicit online marketplace, who they say is an American man named Ross Ulbricht.
The seizure sparked an ongoing public discussion about the future of Bitcoin, the world’s most popular digital currency, but it had an unforeseen side-effect: It made the FBI the holder of the world’s biggest Bitcoin wallet.
The FBI now controls more than 144,000 bitcoins that reside at a bitcoin address that consolidates much of the seized Silk Road bitcoins. Those 144,000 bitcoins are worth close to $100 million at Tuesday’s exchange rates. Another address, containing Silk Road funds seized earlier by the FBI, contains nearly 30,000 bitcoins ($20 million).
That doesn’t make the FBI the world’s largest bitcoin holder. This honor is thought to belong to bitcoin’s shadowy inventor Satoshi Nakamoto, who is estimated to have mined 1 million bitcoins in the currency’s early days. His stash is spread across many wallets. But it does put the federal agency ahead of the Cameron and Tyler Winklevoss, who in July said that they’d cornered about 1 percent of all bitcoins (there are 12 million bitcoins in circulation).
In the fun house world of bitcoin tracking, it’s hard to say anything for certain. But it is safe to say that there are new players in the Bitcoin world — although not as many people are buying bitcoins as one might guess from all of the media attention.
Satoshi stores his wealth in a large number of bitcoin addresses, most of them holding just 50 bitcoins. It’s a bit of a logistical nightmare, but most savvy Bitcoin investors spread out their bitcoins across multiple wallets. That way if they lose the key to one of them or get hacked, all is not lost.
the bubble goes pop..
the phenomena that is bitcoin..i hope nobody bought in at $1100? china has shot it down in flames..the FBI holds the most coins in a wallet..they saw its worth halved..even if it is confiscated coins..
“bitcoin’s shadowy inventor Satoshi Nakamoto”
hes probably worth a bit of research i reckon..i highly doubt its a real person..
“Satoshi Nakamoto is the pseudonymous entity that designed and created the original Bitcoin software, currently known as Bitcoin-Qt. Nakamoto is often claimed to be a veil for a group of people.
His involvement in the original Bitcoin software does not appear to extend past mid-2010.
Nakamoto is believed to be in possession of roughly one million bitcoins. As of December 2013, this is the equivalent of 1.1 billion US Dollars.”