Bitcoin Crashes Down to Near $1000 as China Sets New Parameters to Monitor Identities of Users
by Kenneth Schortgen, The Daily Economist:
As we have mentioned numerous times in previous articles here at The Daily Economist, Bitcoin’s primary kryptonite is not in the digital currency itself, but in the third parties that would seek to manipulate its original scope for their own benefits.
By this I refer to the supplemental constructs that have emerged to help facilitate Bitcoin use such as with currency exchanges, or the introduction of capital controls by sovereign entities that countermand the crypto-currencies benefits of transparency and security.
Recently Bitcoin has experienced massive volatility over the past couple of months, intrinsically tied to one of the above mechanisms. First there was a price spike due to Chinese investors using the crypto-currency as a way to get their wealth out of the Yuan and into something else, and this was then followed by a just as severe a drop in price when the Chinese government halted their local Bitcoin exchanges because the facilities were re-hypothicating customer accounts for pooled transactions.
A few weeks later the price once again soared to a new all-time in the speculation that the SEC might approve of a Bitcoin ETF that would financialize the digital currency on U.S. exchanges.
And now on March 18, the newest intrusion on Bitcoin has emerged when the Chinese government announced they were instituting identity monitoring to their Bitcoin exchanges which in part led to the crypto-currency falling more than $100 USD.
China’s central bank is moving to regulate its domestic bitcoin industry, circulating new guidelines that, if enacted, would require exchanges to identify clients and adhere to banking regulations.
Recent scrutiny by the central bank has already led exchanges to impose trading fees and suspend withdrawals of bitcoin from their platforms. Chinese investors have fled the market.
A draft of the guidelines says Chinese bitcoin exchanges would be…
