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BITCOIN IS CRASHING -- Digital Currency Tanks After Baidu Suspends Usage

Bitcoin prices on the Mt. Gox exchange have fallen 24% to below $US900 after Baidu announced it would stop accepting Bitcoin for its music service users.

According to multiple reports, the Chinese search giant issued a statement saying:

Dear acceleration music users:

Due to the recent fluctuations in the price of Bitcoin larger unable to protect the interests of users, in response to the risk of state-controlled bitcoin spirit Baidu music accelerate decision to suspend with immediate effect from accepting bitcoin buy accelerate music services.

This follows the People’s Bank of China’s announcement announcement that it would not allow banks to handle the virtual currency.

There is also speculation China Telecom has stopped accepting Bitcoin, although we couldn’t confirm this.

China had been a huge driver of Bitcoin’s growth last month, accounting for the majority of Bitcoin trading.

Earlier, the Bank of France warned against using currencies not backed by central banks.

However, Bitcoin also seemingly stood to benefit from a fairly bullish outlook issued by Bank of America analyst David Woo.

Chart:

Bitcoin crash 2

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