Rumours Bitcoin is being banned in China shows how ridiculously volatile it is

The internet giveth and the internet taketh away. Virtual currency investors need to get used to it.

by Rachel Savage
Last Updated: 03 Oct 2014

There are more swings and roundabouts in Bitcoin’s fortunes than in Milton Keynes: no sooner does former Fed chief Ben Bernanke smile upon the virtual currency than allegations of drug laundering sprout out of dark recessesses of the internet.

The price of Bitcoin is super sensitive to all these goings on. Since 1pm yesterday (March 26) the price has plummeted from $588 to $526 as rumours swill around the net that China is considering banning the online currency.

Chinese news services have been reporting that the government is penalising banks dealing with Bitcoin exchanges, according to news site CoinDesk. However, Chinese Bitcoin sites claimed not to have heard anything about it.

Bitcoin already took a whack last week from a previous report that China had outlawed it, which unsurprisingly turned out to be fake. The lesson for any wannabe investors is if you put your faith in virtual coins you need to be prepared for a bumpy ride: Bitcoin is clearly insanely sensitive to rumours.

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