"A dramatic rally in digital currency bitcoin came to a spectacular end on Thursday with a plunge of up to 20% as China's yuan rose sharply - further evidence of an intriguing inverse relationship between the pair," according a statement on NewsWeek.
Bitcoin gained 40 and up percent in two weeks, hitting a three year high of $1,139.89 on Wednesday. It was almost at its all-time record of $1,163 on the Europe based Bitstamp exchange (BTC=BTSP). However, on Thursday, it went to as low as $885.41. The yuan jumped by over 1% in offshore trading.
"Chinese exchanges have reported high volumes of trading on the web-based 'cryptocurrency' over the past year, during which time the yuan has shed almost 7 percent, its worst annual performance since 1994, while bitcoin has surged 125%, outperforming all over currencies for a second year in a row." "Bitcoin can be used for moving money across the globe quickly and anonymously, and operates outside the control of any central authority. That makes it attractive to those wanting to get around capital controls, such as in China, and also to investors who are worried about a devaluation in their currency." according the statement.