The latest Bitcoin rally which started in August of 2016 has been single-handedly crushed by a government backed financial institution, what a surprise right?
After the 6 month rally Bitcoin approached its ATH which is currently $1163 (Bitstamp). The price peaked at $1139, just $24 shy from breaking the record when the PBOC decided to issue a “warning” regarding the cryptocurrency.
The warning was issued in Chinese, but here are some relevant translated snippets:
After the recent Bitcoin volatility, the People’s Bank of China Business Management Department, met with the Beijing Municipal Bureau of Financial Affairs. The meeting concluded suggesting that there are possible legal risks, policy risks and technical risks, requiring business to be in compliance with the relevant laws and regulations.
According to the Notice on Preventing the Risk of Bitcoin issued by the People’s Bank of China, Bitcoin is considered virtual goods, it does not have the same legal status with the currency, can not and should not be used as money in the market circulation. Participating institutions and individuals should carefully engage in activities such as Bitcoin investment and bear the corresponding responsibilities and risks.
Part of the notice quoted an earlier press release which was written in 2013, it is obvious that the PBOC used scare tactics to crash the market. Bobby Lee, the owner of the largest bitcoin exchange in China, met with regulators today and confirmed that the press release is pure FUD (Fear Uncertainty and Doubt) and that China has not banned Bitcoin. According to Mr. Lee:
The press release put forth from the PBOC today outlines volatility in bitcoin trading, and also quoted from a notice released in 2013 saying that bitcoin is a virtual good and doesn’t have legal tender status.
In other words, nothing has changed in China, no new laws banning bitcoin have been passed. It’s not a surprise that China decided to tank Bitcoin’s price yet again, these market manipulations have been occurring for years, and this isn’t the first time Bitcoin’s market has been attacked.
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