The first time Bitcoin broke the $1,000 barrier was in November of 2013, when each coin was worth a maximum of $1,238. However, that value soon crashed into less than $650, thanks to China’s new rules for every cryptocurrency-related transaction.
In November, the Chinese government announced it believed Bitcoin carried risks to its financial institutions, so it ended up deciding to forbid any connection between the digital currency and the local banks, as well as other similar institutions. In a document published on the People’s Bank of China’s website, the authority said that, “at this stage, financial and payment-processing institutions are not allowed to trade Bitcoin”.
And that was when BTC China lost its position as the world’s biggest and most powerful Bitcoin exchange. The measures imposed by the Chinese authorities were fatal to the amazing success the company had conquered so far, but all that went down the drain due to the suspicion of the authorities.
Things only started to look better a while after that period, when China’s central bank addressed Bitcoin in a press conference headed by the chief of its financial survey and statistics department. Sheng Song Cheng said at the time that the government wasn’t looking “to suppress or discriminate against Bitcoin”. According to the representative, the bank was “simply saying it is not a currency”.
“We took a look at Bitcoin and it doesn’t have the characteristics of a currency. As far as I know, the vast majority of countries does not recognize Bitcoin as a currency”, Sheng Song Cheng said at the time.
The decision was welcomed by the Bitcoin community as a positive development, but the local exchanges still took some time to recover, as you can see in this infographic. BTC China only now started to accept bank deposits again, for instance, so recovery might be on the way, but that is for the future to say.