Bitcoin plunges after China plans local Bitcoin exchanges shut down

According to the tipsters, China is worried that cryptocurrencies are creating “too much disorder.” People were buying up Bitcoin and selling the yuan in 2016 on the belief that the conventional currency’s value was going to tumble. Following the latest reports, it is believed that China plans local Bitcoin exchanges shut down.

12 September, AtoZForex China clamp down on ICO has triggered new direction. The country mulls to close down domestic Bitcoin exchanges. The timeline isn’t clear. One says the closure decision had already been made, while another says the process would take “several months.” The rumored government plans to close down domestic cryptocurrency exchanges have seen the cryptocurrencies to shed more than $100 since Friday.

Bitcoin sunk to a low of $4,241 in late trading in the UK on Friday. While on Monday, Bitcoin reached a low of $4,108. Meanwhile, China is home to vast and lucrative cryptocurrency mining operations for both Bitcoin, Ethereum, and other cryptocurrencies. Three Chinese exchanges Bitfinex, OkCoin and BTCC made up over 45 per cent of the global market share over the last 30 days, according to a report.

China previously outlawed ICOs

Bitcoin’s growing popularity in China may have caused the government to begin to perceive it as a threat to local currency. Especially, Chinese investors bought up bitcoin and bet against the yuan last year. The latest reported crackdown follows a decision by Chinese regulators to ban on initial coin offerings (ICOs).

ICOs are a means of raising funds by selling off new digital tokens. The regulators criticized ICOs for disrupting country’s financial order. A crackdown on ICOs would not affect the original cryptocurrency directly. But bitcoin still dropped more than $1,000 over a period of three days. A move to shut down local exchanges will mark a new direction for China in its efforts to regulate the market.

China plans local Bitcoin exchanges shut down – Fake or real news?

Many are skeptical of the rumored shutdown, including Bobby Lee, co-founder and CEO of BTCC. He tweeted and asking whether followers thought the shutdown news is fake or real. So far, 83 per cent have voted that they believe the news is fake. On the same day, BTCC tweeted that the exchange is operating normally. OkCoin also responded with an emailed statement:

‘Til now we haven’t informed by any authorities about closing BTC exchanges. If that happens we will show notifications on our website. Even if that’s the case, we would be running offline trading for users, and your balance of coins in your account will be absolutely safe.”

This isn’t the first time China’s has flexed its regulatory muscle on Bitcoin. Earlier also China had banned the cryptocurrency from all banks and financial institutions and left exchanges alone in 2013.

Share with us your opinion in the comments section below.

    Share Your Opinion, Write a Comment