Market Overview

Bitcoin Has A China Problem

Bitcoin Has A China Problem
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Chinese regulators have shut down bitcoin exchanges, leaving the future of digital currencies in China up in the air and sending the price of bitcoin and ether tumbling. On Thursday, China Business News and 21st Century Economic Report both reported that regulators verbally instructed Chinese exchanges to shut down. BTC China later tweeted that it will “stop all trading on 09/30.”

The price of bitcoin plummeted another 9 percent Thursday, while rival currency ether dropped 12 percent. Bitcoin is now down roughly 30 percent from its all-time high earlier this month. Ether is down about 40 percent from its all-time high in the summer.

The Chinese central bank banned initial coin offerings last week and said that the regulation of cryptocurrencies is aimed at reducing abuse and fraud. Bitcoin, ether and other digital currencies allow completely anonymous financial transactions, making them popular tools on the black market. Blockchain Intelligence Group estimates that illegal transactions account for roughly 20 percent of total bitcoin volume.

A freeze in the Chinese bitcoin market is a major blow to investors. Chinese business news magazine Caixin estimates that China’s share of total global bitcoin trading volume peaked at around 90 percent.

“The Chinese ban is causing a panic in the market as mixed messages and lack of clarity has turned sentiment negative,” said Cryptocompare founder Charles Hayter. “The closure of BTCChina is perhaps a portent of what the other Chinese exchanges face.”

The Bitcoin Investment Trust (OTC: GBTC) was hammered on Thursday as well, dropping 9.0 percent in early trading. The fund is now down 48.7 percent in the month of September.

Related Link: Ex- SEC Commissioner Suggests Owning Shares Of Companies That Use Bitcoin But Not The Currency Itself


Posted-In: Cryptocurrency News Emerging Markets Specialty ETFs Forex Legal Markets ETFs Best of Benzinga


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