The price of virtual currency Bitcoin plunged for the third consecutive day on Wednesday, losing nearly a third of its value, after BTC China, the world’s largest exchange by volume, said it has stopped accepting new yuan deposits.
BTC/USD plummeted 24.6% during European morning hours to trade at USD545.10 on the Tokyo based Mt. Gox Bitcoin exchange. The currency sank by as much as 32.8% earlier in the day to hit a session low of USD480.00, the weakest level since November 20.
China''s largest Bitcoin exchange, BTC China, said earlier in the day that it "has no option but to stop accepting yuan deposits," one day after China’s central bank said it was cracking down on transactions made using the currency.
The People’s Bank of China banned third-party payment service providers from offering clearing services to online Bitcoin exchanges on Tuesday, a crippling blow that could make it much harder to trade the virtual currency in China.
The PBOC recently said that Bitcoin did not qualify as a currency and lacked legal protections and that financial institutions and payment systems were not allowed to take deposits from Bitcoin-related businesses.
Rising demand from China has seen the country become the largest Bitcoin market in recent months, as buyers seek to profit from speculating in the currency.
Bitcoin is digital cash for the internet and it is not backed by a government or central bank to regulate or issue it. It can be used to purchase goods and services from an increasing number of stores and online retailers.
Bitcoin rose to an all-time high of USD1,241.10 on November 29. It was trading at USD100 in early October.
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