Zynga accepts Bitcoin payments

Bitcoin recovered its value to over $1,100 on the Mt. Gox exchange after social online games company Zynga Inc. said it plans to accept Bitcoin payments.

The virtual currency with no central banking authority rose to $1,119 today.

Zynga says it has started to accept Bitcoin paymenst for tokens of virtual goods on the web versions of CityVille, Hidden Shadows, Hidden Chronicles, CoasterVille, ChefVille, CastleVille and FarmVille 2. It is the first major gaming firm to accept Bitcoin.

There was panic selling of Bitcoin in December after The People’s Bank of China restricted trade. China’s central bank had told all financial institutions that bitcoin-related business was forbidden, including collateral business, deposits and custody services.

As China accounts for approximately 40% of all bitcoin global trading, many analysts thought the central bank’s move had been the kiss of death for the virtual currency, which dropped in value from $1,250 to $421 in a matter of days.

However, since then the virtual currency has rebounded as more businesses announced their acceptance of Bitcoins.

Bitcoin, a resilient currency

Bloomberg Businessweek quotes Nicholas Colas, Chief market strategist at ConvergEx Group, who said “Bitcoin has been remarkably resilient in the face of all the bad news out of China. The strength shows a continued interest, which is a very positive sign.”

One year ago Bitcoin was trading for approximately $13. It rose in value rapidly, gaining a foothold of respectability after the Silk Road Hidden Website was shut down by regulators. The website was being used to purchase drugs, guns and other illegal goods. In November, 2013, US authorities said in Senate hearings that Bitcoin may be a legal means of exchange.

Zynga spokesman, Dani Dudeck said “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.”

Rather than make the announcement via a press release, Zynga informed the public through a message in Reddit.com:

“We wanted to share with the r/bitcoin community that Zynga Inc. (NASDAQ: ZNGA) is now conducting a Bitcoin test with BitPay, a leading Bitcoin service provider, in select Zynga.com web games.”

“In response to Bitcoin’s rise in popularity around the world, Zynga, with help from BitPay, is testing expanded payment options for players to make in-game purchases using Bitcoin.”