Zynga Inc. (ZNGA) announced the successful acceptance of Bitcoins today, driving the value above $1,000 again as the digital currency gains traction amongst users in a move the company claimed was warranted by the more widespread use of Bitcoin.
Indeed, Bitcoin has remained surprisingly immune to negative events in China as of late, the most recent coming when China’s largest Bitcoin exchange abruptly announced that it had stopped accepting deposits in Chinese currency on December 18th. According to Nicholas Colas, Chief Market Strategist at ConvergEx Group in an e-mail, “The strength of Bitcoin shows a continued interest, which is a very positive sign.”
Zynga Opts For Digital Currency Payments For Its Comprehensive Gaming Suite
San Francisco-based Zynga represents an intriguing choice for a Bitcoin channel, given the online gaming company has only recently rebounded out of dire straights, reflective in its stock price. According to Forex Magnates research, the company’s stock trades at $4.04 (52-week low of $2.40), incurring a 1.76% daily gain on news of the Bitcoin payment announcement. Alternatively, the love for Bitcoin has proved to be slightly fleeting with the price now dropping back below the $1,000 threshold to $964.00 at the time of writing.
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“Players will be able to pay via the BitPay payments service for players of FarmVille 2, CastleVille and other games. Moreover, we look forward to hearing from our players about the Bitcoin test so we can continue in our efforts to provide the best possible gaming experience,” said Dani Dudeck, a spokeswoman for Zynga, in the company’s statement.
Bitcoin Isn’t All Fun and Games
The word that can most often be associated with Bitcoin recently is volatility – the digital currency has ascended to a record $1,238 back in early December before crashing back to $640 on news of the Chinese cessation of deposits recently. That Zynga has announced its acceptance of Bitcoin remains to be seen as either a paradigm or experiment. In essence, the move makes sense given that Zynga’s product is strictly virtual in nature – a subset of its widely successful gaming suite that nearly everyone with a smartphone has had some exposure to.
“I think that as demand for investing in Bitcoin rises and friction in its markets is removed the price will continue to go up. The $1,000 mark does seem to be an important level because it may dissuade the skeptics that emerged when Bitcoin prices took a big step down,” noted Gil Luria, an analyst at Wedbush Securities Inc. in a recent e-mail.
Bitcoin exists as software and lies outside the realm of any central government or monetary authority – the source of its greatest intrigue and potential risks. While many question the inherent risks of a currency that answers to no regulator, others see promise. From its enigmatic origins back in 2008 and sometimes nefarious uses and propensity for falling prey to laundering outlets, Bitcoin does offer users a completely untainted option in a world riddled with central banking tinkering.