Bitcoin Tanks as RMB Spigot Dries Up

Bitcoin, which can be used for consumer finance but is traded exclusively via electronic exchanges, has been the object of immense speculation in recent months. But the lack of any new renminbi-based inflow has reduced its value by nearly 40 percent in a single day, according to reports. In China, the currency topped out at the beginning of this month at 7,395 renminbi, or $1,218 in US dollars. It now buys at less than a third of that price.

As was examined earlier this year in SST, the relative merits of Bitcoin as a currency, and its slowly-expanding capital markets relevance, have come under global regulatory scrutiny both in the United States and elsewhere, though the blanket restriction by Chinese authorities represents the strongest curb to date.