Bitcoin value plummets over Chinese trading ban rumors

Dianna Christensen
September 12, 2017

"This will definitely slow the development of cryptocurrencies in China". The country accounts for about 23 percent of bitcoin trades and is also home to numerous world's biggest bitcoin miners, who confirm transactions in the digital currency.

In the past, the Chinese government has banned Bitcoin transactions at banks and retailers, and more recently it banned ICOs, Initial Coin Offerings.

The bitcoin and ethereum prices were hit hard over the weekend as there were reports from China that said that the regulators were about to go after the bitcoin exchanges next and ban them totally within the next few days.

"Trading volume would definitely shrink", said Zhou Shuoji, Beijing-based founding partner at FBG Capital, which invests in cryptocurrencies.

Bitcoin slumped last Friday after Caixin magazine reported China's plans, capping the virtual currency's biggest weekly retreat in almost two months.

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The clampdown is seen as part of China's efforts to regain greater control over its own currency, the yuan, after the surge in bitcoin's price a year ago was attributed to eager Chinese buyers looking to sell yuan, fearing its collapse.

China's influence on global markets is not restricted to just traditional currencies, with the country's biggest exchanges accounting for a fifth of all transactions over the course of the past month. "Just 15 percent of global bitcoin trade against Japan, Korea, and the U.S., which equal to 80 percent", said Kikvadze.

The price of Bitcoin dropped sharply after news about a crackdown on virtual currency exchanges emerged on Friday.

At one point in time, China's influence on the cryptocurrency was dominant, having accounted for as much as 90pc of trading activity, but this has since diversified globally. China's largest bitcoin exchanges, OKCoin, BTCChina and Huobi, told Bloomberg on Monday that they still have yet to be contacted regarding any trading ban.

"Whenever you start to hear about Hong Kong taxi drivers becoming millionaires from buying bitcoin, you start to think this is not necessarily driven by fundamentals", he said.

Other reports by GlobalViralNews

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