Down 38%: Bitcoin Stumbles Amid Regulatory Uncertainties In China

BTCC, the world's longest-running bitcoin exchange, announced yesterday that it will suspend trading on September 30.

As the news broke, bitcoin price has plunged by 16% and is expected to come down below $3,000.

According to China Business News, regulators in Shanghai and the country's financial center gave verbal instructions to exchange operators to end services. Just two days ago China's Bitkan announced that it will suspend over-the-counter (OTC) Bitcoin (BTC) and Bitcoin cash (BCH) trading from Thursday.

"The current pricing assumes massive adoption, and I don't think governments will allow the amount of adoption that's now priced in", said Mohamed El-Erian, chief economic adviser at Allianz Global Investors, on CNBC Wednesday morning. I've heard the argument that China is not closing the exchanges permanently, but suspending them until tighter oversight is implemented.

He went on to say that only drug dealers, murderers or if you are in Venezuela, Ecuador or North Korea, you would be better off dealing in bitcoin rather than in U.S. dollars.

Bitcoin was trading 11.17 per cent lower at $3,441.47 at the time of writing, according to CoinDesk's index - the cryptocurrency's lowest price in more than a month. The contributions, which had grown with the increase of the other crypto-currencies including bitcoin, are barred and should stop with immediate effect, the People's Bank of China claimed to the media this week.

Even so, the notices suggest Chinese policy makers are moving quickly on a previously reported plan to end exchange trading, their most far-reaching measure to rein in the growth of cryptocurrencies.

The Chinese central bank banned initial coin offerings last week and said that the regulation of cryptocurrencies is aimed at reducing abuse and fraud.

Li Lihui of the National Internet Finance Association of China, who previously served as the president of the Bank of China, also urged global regulators to work together to tightly supervise cryptocurrencies.

China has been cracking down on fundraising through launches of token-based digital currencies, targeting initial coin offerings in a market that has ballooned this year.

Recent news from China has impacted the price of Bitcoin sending it on a downward spiral.

On October 31, in turn, we will gradually stop all the digital asset exchange operations associated with the RMB trading business.

  • Eleanor Harrison