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BTCChina to stop all trading by month end, bitcoin price plummets to near $3,200
Leading Chinese bitcoin exchange BTCChina has announced that it will stop all trading on BTCChina Exchange, effective September 30, 2017.
1/ After carefully considering the announcement published by Chinese regulators on 09/04, BTCChina Exchange will stop all trading on 09/30.— BTCC (@YourBTCC) September 14, 2017
The announcement follows recent reports that suggested that Chinese authorities were planning to stop the exchange of digital currencies for fiat currency in the country. Moreover, seven regulatory authorities in China jointly issued a statement earlier this month calling for immediate cease of initial coin offering (ICO) activities in the country.
A source told local news outlet Yicai said that Chinese authorities have decided that the trading activities of all cryptocurrency trading platforms shall be suspended soon and closed thereafter.
BTCChina’s announcement drove the bitcoin price to below the $3,500 mark. It hit $3210 levels on Thursday and is currently trading at $3338 levels at the time of writing (Bitstamp)
What cryptocurrency experts say?
Rob Viglione, Co-Founder of ZenCash, noted that while there is a wave of negative information weighing on cryptocurrency markets, there is a “silver lining” in the sense that global regulators are starting to provide some clarity.
“News that BTCChina, the fifth-largest bitcoin exchange, plans to discontinue trading on Sept. 30th. is the crescendo in a wave of negative information that is weighing heavily on cryptocurrency markets. This comes after a recent regulatory ban in China of ICOs and JPMorgan’s Jamie Dimon calling bitcoin a “fraud” that is set to “blow up”, Viglione said. “Already, we’ve seen about $60 billion in value wiped from the peak earlier this month, but there is a silver lining that may be hard to see through the clouds: Regulators are starting to provide some clarity, and even if new rules aren’t ideal, they’re better than the uncertainty of potentially inferior regulation.”
“The big question is whether this shock is already internalized into asset prices, or if there’s risk of a continued cascading sell-off. One good thing about crypto markets is that they are largely equity-based, and not massively interconnected webs of leveraged derivatives with unknown counterparties, as is the norm in modern banking. The China ICO ban and the cessation of trading certainly have deep initial impact to prices, but also a much smaller marginal contribution to systemic risk than we’re used to seeing from large financial institutions, like Dimon’s JPMorgan.”
Commenting on the recent plunge in bitcoin price, Bharath Rao, CEO of Leverj, said:
“For those of us in the exchange space, the possibility of governments clamping down on exchanges is a foregone conclusion ever since bitcoin was first noticed by the government. Bitcoin price has dropped to $3,500 amid news of the BTCChina exchange shutdown. The price is always a solid metric of the markets’ greed and fear, and reflects regulatory uncertainty at the moment. This also signals that development of non-custodial and decentralized models will accelerate. Regulation is neither necessary nor possible for decentralized models, and the future may have gotten just a bit brighter by nudging the crypto community to develop high speed, non-custodial exchanges.”
Jason English, VP of Protocol Marketing at Sweetbridge, said:
“China is practically building a cottage industry for mining and exchanging bitcoin and other cryptocurrencies, so it is hard to believe that they intend to exit a market with so much potential upside. Even the apparent ban on ICOs seemed to be more of a stopgap in order to get some policies in place. If anything, this example shows the volatility of the space and that some market-makers can likely take advantage of an unclear news cycle to create a sell-off and buy back opportunity.”
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