The price of bitcoin fell sharply after a report China’s regulators are planning a further crackdown on the digital currency. Bitcoin and altcoins have dropped up to 25% in hours after rumors surfaced. Local outlet Caixin is reporting the Asian country is planning to shut down local bitcoin exchanges, according to a Google translation. Bitcoin’s price fell 7 percent Friday following the news, according to Coindesk market data. Earlier in the week on Monday, Chinese regulators announced a ban on organizations from raising funds using initial coin offerings (ICOs), which sparked a $200 decline in the price of bitcoin.
In particular, the report is saying that Chinese citizens won’t be able to use exchanges to buy bitcoins, ethers and more using Chinese yuan, and vice versa. Crypto currencies aren’t banned per se, just exchanges. But do bitcoins have value in China if you can’t exchange them? That’s the main question and the reason why cryptocurrencies are crashing.
Markets have reacted sharply, Bitcoin losing over 8% to head towards $4200 from $4670, while Litecoin fell 15% and others followed.
NEO, the Chinese ICO project especially affected by regulatory upheaval, lost 25%.
While little evidence has appeared to support a full ban on trading, even under this eventuality, Chinese authorities are repeating behavior already seen once in 2017.
January’s several-month exchange ban lasted until May, when new guidelines came into effect allowing trading to resume.
Article Source – CNBC