Bitcoin bounces back above $1,000 after this new endorsement

Bitcoin has bounced back across the $1,000 (£610) mark in the wake of the announcement that social game company Zynga would accept the virtual currency for some of its services. Players of games such as FarmVille 2 and CastleVille will now be able to use Bitpay, a Bitcoin payment provider to make in-game purchases.

Zynga confirmed its position in a Reddit post saying:

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.

Bitcoin has made significant progress since its dramatic fall to $558 (£340) after a wave of prohibitions in China at the end of 2013. The People's Bank of China (PBOC) announced a ban on financial institutions handling Bitcoin transactions. The PBOC declared that Bitcoin was a currency without “real meaning.”

China’s central bank extended its Bitcoin ban to payment providers that service BTC China, China’s largest Bitcoin exchange, stopping the country’s citizens from buying the currency.

Chief market strategist at ConvergEx Group, Nicholas Colas said “Bitcoin has been remarkably resilient in the face of all the bad news out of China."

The virtual currency has also been subject to sharp criticism from European regulators. The European Banking Authority (EBA) warns that "no specific regulatory protections exist in the European Union that would protect consumers from financial losses if a platform that exchanges or holds virtual currencies fails or goes out of business."

Norwegian authorities announced in December they will be placing a tax on the cryptocurrency. In Norway Bitcoin will be treated as an asset and will be subject to capital gains tax.

Despite the hostility of governmental authorities across the world, Bitcoin continues to gain popularity. Video game retailers are not the only ones embracing the new currency. Victoria's Secret stores signed up in December with Gyft, an app that allows buyers to purchase gift cards with Bitcoins.

Chief executive officer (CEO) Patrick Byrne said, “We think there’s an underserved part of the market that wants to use Bitcoins and can’t."