Published: Sat, September 16, 2017
Economy | By Melissa Porter

Bitcoin Crashes Hard After Second Largest Chinese Exchange Announces Shutdown

Bitcoin Crashes Hard After Second Largest Chinese Exchange Announces Shutdown

The price of bitcoin plunged on Thursday after Chinese authorities crack down on cryptocurrencies, with the country's biggest exchange announcing the suspension of operations.

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 Chinese ban is causing a panic in the market as mixed messages and lack of clarity has turned sentiment negative", said Charles Hayter, founder of data analysis site Cryptocompare.

Shanghai-based BTCChina, a major Chinese bitcoin exchange, said on Thursday it would stop all trading from September 30, citing tightening regulation, while smaller Chinese bitcoin exchanges ViaBTC, YoBTC and Yunbi on Friday also announced similar closures.

ICOs has fueled the fast ascent in the value of all cryptocurrencies, from about $17-B at the start of the year, to a record high close to $180-B at the beginning of September.

China's central bank has yet to respond to questions about bitcoin's future in the country but earlier warned it was traded without regulatory oversight and might be linked to fraud. The cost of the bitcoin declined to 26,400 Yuan (almost to $4,029) on BTC China this week compared to 32,500 Yuan of last week. While the news isn't official yet, Caixin said it has seen the policy document and confirmed its authenticity with a source close to China's regulators.

Bitcoin is a digital currency and is accepted the world over. Still, the industry was thrown into chaos on September 4 when China issued a directive banning initial coin offerings (ICOs). Rumors began spreading regarding a potential suspension of all Bitcoin trading activity by centralized exchanges.

The price of bitcoin fell dramatically upon the news. However, the Chinese government is considering creating its own cryptocurrency.

The announcement by the exchange BTTC followed the news a fortnight ago that the Chinese authorities had banned initial coin offerings.

The announcement was viewed as one way for Beijing to get power over crypto-currencies, which are made using blockchain tech and are bought and sold online without any regulation of the government.

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