Bitcoin Takes Jabs From China and Greenspan

Bitcoin, a game changing new medium of exchange, has been taking some jabs from China and the former Fed Chairman Alan Greenspan. The revolutionary currency that has been commanding the financial world’s attention for some time now, has recently met with some high-profile criticism. The virtual money was chugging along doing quite well after a vote of confidence from US authorities, until it recently encountered some negative-Nancy attitudes.

Bitcoin had commanded a price of around $600 prior to the stamp of approval from the US which almost instantly doubled its trading price. The crypto-currency was at one point inching its way up towards the price of an ounce of gold, before recent developments caused its market price to drop below $1,000.

In an unexpected move, the central bank of China decided to prohibit its banking and financial institutions from being able to use bitcoin. It issued the ban citing its belief that the virtual money is not a real currency. The central bank highlighted many of the known concerns regarding the currency such as its potential to facilitate money laundering. Governments and critics alike have taken issue with the fact that the new crypto-currency leaves the door open for some nefarious activity and that the currency itself poses some long-term risks to financial stability.

While there may be some legitimate concerns regarding just how the growing use of virtual currencies like bitcoin might revolutionize the global economy, blaming the currency for the illegal activity individuals do with it seems hardly fair. China, in its defense, did not ban individuals from trading the currency themselves so long as they knowingly and willingly assumed the risks themselves.

Bitcoin trading fell below $1,000 Thursday upon news of the Chinese ban. The development seemed to stall the momentum enjoyed by the virtual currency since its US stamp of approval. While the wobble might have shaken the faith of some bitcoin holders around for a quick buck, it was apparent that the majority of holders were undaunted and the crypto-currency was trading over the $1,000 again in the same day. Bitcoin however, not only had to withstand negative policies in China, but also had to bob and weave as former Fed Chairman Alan Greenspan decided to take a few swings at the new currency.