Bitcoin lost more than 10 percent of its value over the past few days, having gone from trading at around $500 to $440. As usual, this is down to a hit from China. The latest crackdown came from BTC China, which has decided to ban local-currency deposits from China Merchants Bank, a major financial institution in the country.
The weight of Chinese influence on the currency cannot be understated. With such tight control over financial institutions by the government, a cryptocurrency like Bitcoin could be of enormous attraction to Chinese citizens. Bitcoin relies heavily on the wims of the Chinese government, even more than other governments. Recent news has shown that the French government is to start taxing any transactions of the currency. On the other hand, the U.S. has declared Bitcoin to be classed as "property" rather than currency, which would bring a whole new set of tax rules to the table. China, however, will have the biggest hand in Bitcoin's future.