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Bitcoin Tumbles on China Restrictions

Bitcoin's value had been hovering above $1,000 USD per BTC for most of December, but a decision made in China has triggered a collapse in value that is unprecedented in the short history of Bitcoin's existence.

Bitcoin lost half its value overnight—with BTC to $USD rates hovering around $500 on major BTC exchanges, including Mt. Gox, on Wednesday morning.

The collapse in Bitcoin's value is not a security-related incident, as there has been no major vulnerability found in Bitcoin and no big breach that triggered the decline. The dramatic decline in BTC value is due to just a single factor in a single country that is having worldwide repercussions. The government of China has officially banned payment companies from providing financial clearing services for BTC and other virtual currencies. BTC China, which bills itself as the largest Bitcoin trading platform in China, announced Tuesday night that it was no longer allowed to accept Chinese currency to trade for BTC.

Read the full story at eWEEK:
Bitcoin's Value Plummets Overnight

Sean Michael Kerner is a senior editor at InternetNews.com. Follow him on Twitter @TechJournalist.