Bitcoin plunged another 12 percent on Friday after China’s central bank urged investors to take a rational approach to the digital currency, which has is on track for its heaviest two-day falls in two years.
Bitcoin had gained more than 40 percent in two weeks to hit a three-year high of $1,139.89 on Wednesday, just shy of its all-time record of $1,163 on the Europe-based Bitstamp exchange, reports Reuters.
But the digital currency – which has shown an inverse correlation to the Chinese yuan in recent months – plunged as the yuan soared on Thursday, falling as much as 20 percent at one point, before closing the day around 10 percent down on the day.
A customer feeds cash currency into a Bitcoin ATM located in Flat 128, a boutique in New York’s West Village
On Friday it fell to $887, having lost almost a quarter of its value since Wednesday’s peak. Bitcoin prices had showed abnormal fluctuations, the Shanghai head office of the People’s Bank of China (PBOC) said in a notice. It stressed bitcoin is not a currency and cannot be circulated as a real currency in the market.