The ups and downs of Bitcoin currency

After a run-up in value of Bitcoin, the digital currency independent of banks or governments, Chinese officials have rebuked its use and stymied its surge.

On the largest exchanges trading Bitcoin – Mt. Gox, BTC China and Bitstamp – the currency’s value increased sharply in November to nearly $1,250 but dipped in December following the warning notice issued in China.
 
According to the New York Times, Peoples Bank of China and other government agencies declared Bitcoin was not a true currency and warned against its use to prevent money laundering and protect financial security. The French government and European Union also have voiced strong concerns.

The price of one Bitcoin started the year at less than $20, and it is roughly $1,100 now.

The notice is critical given the Chinese market that has quickly accepted the virtual currency.

Wall Street has viewed it more favorably, and Bank of America Merrill Lynch has begun to cover Bitcoin based on its potential in e-commerce and money transfer markets. In a research report (read it here), the bank described Bitcoin as allowing users “to send payments within a decentralized, peer-to-peer network (without requiring) a central clearing house or financial institution clearing transactions.”

Read more from the New York Times.