Bitcoin Exchange Rate Drops 25% On News Of Baidu Halting Bitcoin Acceptance
Baidu, the Chinese equivalent of Google, is no longer accepting Bitcoin payments. Baidu first accepting Bitcoin just a few months ago has been considered by many to be the “spark” that ignited the keg of Bitcoin sentiment in China that in turn led the recent rise in exchange rate.
In a concise post Baidu told Chinese users that they were, effective immediately, halting their acceptance of Bitcoin.
Due to today’s Bitcoin exchange rate volatility, during which we couldn’t profitably guarantee our users’ purchasing power, and as a response to the government’s fervor in controlling Bitcoin, Baidu’s Music Services effective immediately will no longer be accepting Bitcoin.
This news, which Bitcoiners are reading as indicative of general Chinese merchant sentiment, comes on the heels of the People’s Bank of China declaring Bitcoin to be a virtual commodity. Along with that, China has barred its banks from handling Bitcoin directly or doing things such as providing underwriting services for Bitcoin insurance. The Chinese have always been aware of their government’s hard line against virtual currencies and the fact that Bitcoin has not been lumped together with banned centralized virtual currencies is a huge win for Bitcoin in and of itself. During the US Senate hearings on virtual currencies, no American government agency had anything to say about Bitcoin without qualifying it with their successes against Liberty Reserve and E-Gold.
Regardless, it seems that some Bitcoin speculators were actually hoping for better news than that released in the last few days and Bitcoin has since taken a 25% plunge in exchange rate value. From a high of 1.040 USD/mBTC to a low of 0.797 USD/mBTC in just the last 24 hours on Bitstamp. Check out the action at Bitcoinity.org which has recently switched from USD/BTC to USD/mBTC so don’t be scared by the different numbers… Bitcoin didn’t “crash” that much.