Bitcoin Down $7 Dollars, Nears $250 on BTC-E

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Bitcoin had a leg down today. On BTC-E we opened at $263.09, slowly lost ground to end the session at $257.88. In the new session, the selling resumed and BTC is currently quoted at $255.96 on this exchange. The chart below shows today’s bitcoin move lower.


On rival exchange OKCoin we saw prices fall from $266.64 to close at $262.64. Right now are trading at $260.00. Futures on the same exchange continue to trade at a premium.The nearer August 21st contract is at $263.31 while the far out September 25th is trading at $267.31.

The Bitcoin Futures Index, a price used for the settlement of futures contracts on OKCoin, is quoting $263. This is largely due to the large price gap between USD and CNY exchanges. Most exchanges trading BTC for USD are near OKCoin’s $260 dollars while the Chinese Yuan sites are quoting $265. Because the calculation for the Index is spit 50/50 between USD and CNY sites, the average between the two gives us the current $263 dollars quote.

In the aftermath of the Chinese devaluation earlier this week, bitcoin started to fetch a premium when sold for Yuan, because the threat of further depreciation. This premium remains even though the People’s Bank of China indicated two days ago that the fall in the Chinese currency is almost over. In its latest fixing, the Bank kept the main reference rate almost unchanged, refraining from a new devaluation.

If the PBOC says they’re done, why haven’t prices on bitcoin CNY exchanges bounced back inline with the market? One theory says that investors are not taking the Bank at its word. But the

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