The brief surge in Bitcoin value at the beginning of the year halted and the virtual currency fell back as much as 20 percent in the face of a strengthening yaun.
Starting on New Year’s Day, Bitcoin had surged more than 40 percent to as high as $1,139.89, close to its all-time high. But as prices for the Chinese yaun subsequently rose in trading, the virtual currency fell back about 20 percent to as low as low as $885.41.
A major portion of Bitcoin trading takes place in China—estimates range as high as 90 percent—where investors often use Bitcoin for trade in foreign currencies, which is restricted in China. As the yaun sunk as much as seven percent in 2016, Bitcoin strengthened.
The quick fall of Bitcoin after the yaun advanced, however, shows how closely Bitcoin trading is tied to Chinese markets, analysts said.
