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Image source: http://www.flickr.com/photos/100239928@N08/

Image source: http://www.flickr.com/photos/100239928@N08/

For the past six weeks, fear of a looming crackdown on bitcoin-related banking accounts in China has pushed cryptocurrency prices down across the board. Bitcoin, which was trading in the $630 range even in the immediate aftermath of the Mt.Gox fiasco, plummeted to under $360 last week amid speculation that the People’s Bank of China would be issuing new rules for bitcoin exchanges effectively banning them from the nation’s banking system. With that deadline mere hours away, and no official statement from the PBoC in sight, it appears that the crash-inducing rumor was unfounded.

As normal business resumed in China without a PBoC statement, the price of bitcoin on Chinese exchanges steadily climbed, gaining $60 in a matter of hours. Prices still have a long way to go to recover from the impact of the recent rumors and “FUD” (fear, uncertainty, doubt), but have at least recovered to pre-panic levels.

The panic does appear to have hardened Chinese exchanges against future regulatory fears. At least two major exchanges, OKCoin and Huobi, have announced plans to move at least some of their operations offshore to prevent their accounts from being closed or seized. At the same time, both OKCoin and BTC China have announced the launch of new bitcoin ATMs, which would avoid some existing restrictions on how bitcoin can be purchased in the country.

Bitcoin’s price recovery might not be entirely driven by China, however. Recent high-profile statements by well-known investors such as Marc Andreessen, Fred Wilson and Bill Miller have hinted that Wall Street will be making its first big moves into bitcoin this quarter. Recent moves by Facebook also suggest that bitcoin-like models for currency transaction are set to become major tech trends in coming months.

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