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Bitcoin Value Drops as Chinese Cash in on Alibaba

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The value of bitcoin has dropped considerably recently, which some commentators have attributed to Chinese bitcoin holders cashing in the virtual currency in large amounts to purchase shares in Chinese internet giant Alibaba, which went public last week on the New York Stock Exchange, reports China’s state-run Securities Times.

The trading price of bitcoin has dropped against the dollar to below US$400, down from close to US$600 in early August. The price of the virtual currency has also dropped 30% on Huobi, China’s bitcoin exchange platform, from 3,600 yuan (US$586) to below 2,500 yuan (US$407).

The report cited bitcoin operation and observation agencies, which stated that the listing of Alibaba was the main reason behind the bitcoin dump in China.

On Sept. 19, the day Alibaba went public, the trading value of bitcoin plunged by as much as 11% to below US$380.

Recent sales of bitcoin in large quantities have been sourced to China. Bitcoin transactions in China exceeded those in the US by 52% last month, and the average trading amount increased from 19,000 to 29,400 per day during the past week.

Some think that the money may flow back into the bitcoin market once investors withdraw funds from Alibaba, but not if Alibaba’s stock price continues to climb. Others commentators think that the sell-off of bitcoin was not necessarily related to the Alibaba listing.

Source: http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20140924000013&cid=1206

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