The Chinese are fleeing Bitcoin, causing BTC to bottom out to its lowest levels this year.
One bitcoin was worth just $391.05 this morning, as a sell-off by Chinese investors nudged it below the $400 threshold.
Following the false alarm of a ban on all Bitcoin transactions on 18 March in a statement by the Central Bank, there is now ample scope for knee-jerk reactions to any further news. Indeed, equities.com reported on the ‘pack mentality’ of Chinese investors, creating additional fears in situations which may not in fact be definitively negative for BTC.
However, the government previously allowed free trading of BTC, calling it a “special virtual commodity”, but this relative freedom seems to no longer be popular with policy makers.
As Chinese citizens will shortly only be able to purchase a maximum of $50,000 annually, it seems that the government’s stance on the currency is not tantamount to a ban, but rather control of capital flight. However, this may have been enough to cause a mass migration from Bitcoin to other outlets.
Additional pressure from the other side of the world, as the IRS declares Bitcoin owners are subject to taxation, is creating a hostile environment for the currency in two of the world’s most significant markets.
None of this news seems to have caused official shockwaves, though, with BTC China website carrying no updates.
“The future of Bitcoin depends on its being used for something, and all this regulation is narrowing the legitimate possible uses.” – Matthew Slater
“These rumors from china could actually be a blessing in disguise because lowering its price will make it more accessible for purchase to the average person, increasing its buyer appeal and leading to subsequent growth.”– Matthew Cunningham