Despite Trouble at Alibaba, Bitcoin Prices Cross the $1000 Mark Again

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Despite Trouble at Alibaba, Bitcoin Prices Cross the $1000 Mark Again
Despite Trouble at Alibaba, Bitcoin Prices Cross the $1000 Mark Again

Despite Trouble at Alibaba, Bitcoin Prices Cross the $1000 Mark Again

Bitcoin which reached the highest levels in December 2013 where it traded above $1200 fell significantly to half its prices later on. It is now again trading above $1000. According to market analysts, the jump in the exchange rate is due to multiple announcements of major businesses accepting the digital currency.

As ForexMinute reported earlier, Zynga announced that it is working with BitPay, a Bitcoin-payment processor, to test accepting the digital currency as payment in certain online games, the Bitcoin prices are expected to go up further. In a similar move, the CEO of Overstock.com, a popular discount-shopping website, had revealed plans to accept Bitcoin in the first half of 2014.

Whereas the prices are up for Bitcoin, Bitcoin is facing new trouble at Alibaba Group Holding Ltd which has banned the sale of Bitcoin and other virtual currencies after the country’s central bank tightened regulations in December. Alibaba is China’s largest e-commerce website, has decided that following the guidelines issued by the Chinese authority, it is not going to deal in Bitcoin.

In its statement Taobao Marketplace, one of the main platforms that link buyers and sellers on Alibaba, declared that the decision will be effective from Jan. 14. Thus, from then on the sale of Bitcoin and related products that may include inter alia mining software and hardware for the virtual currency won’t be done.

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A Month Old Decision

It is close to a one month now when China’s central bank stopped financial institutions from handling Bitcoin transactions as according to it, these are unsafe and lack legalities. The trouble for Bitcoin started when Chinese investors started buying Bitcoin and its value jumped 89-fold. The Chinese authorities saw the risks it comes with and issued a guideline to warn Bitcoin users.

Later on, following the guidelines issued by the central bank of the country, Alibaba too decided to ban the sale of virtual currencies and related products so that users are protected as was expected by the Chinese authorities. The latest decision on the part of Alibaba is a result of recent central bank regulations and concerns about risks associated with Bitcoin.

According to some traders and Bitcoin supporters, the changes will have quite a big impact on Bitcoin trading in China. However, Alibaba is not the only company that has stopped dealing in Bitcoin; some other players like YeePay, TenPay and several others too have decided not to deal in Bitcoin transactions to rule out ire on the part of Chinese authorities.

To contact the reporter of this story: Deepak Tiwari at Deepak@forexminute.com

  • David

    Wow, the growth of Bitcoin over the past year or so is simply amazing. I remember reading about the Bitcoin bandwagon when it was still relatively new. Kicking myself for not looking deeper into it while the entry price was still cheap compared to what it is today.