Bitcoin Crashes 35% In China: Beijing To Shut All Local Exchanges By End Of September

Tyler Durden's picture

Update: Confirming the other speculation, that China would halt all cryptocurrency exchange, Yicai reports that it is not just BTC China: 

  • CHINA MAY SHUT ALL LOCAL BITCOIN EXCHANGES BY SEPT. END: YICAI

To which the response from the Bitcoin Association of Hong Kong is: "if China restricts growth in bitcoin" it will drive business to us"

* * *

Yuan-denominated Bitcoin has crashed as much as 25% 35% in Chinese trading, plunging from 25,000 yuan to as a low of 16,000 on local exchanges BTCChina (and as low as 20,000 on OKCoin), following confirmation of last week's Caixin report that Beijing would stop cryptocurrency exchange trading. China's second largest exchange, BTC China, said that it would halt all trading on the platform beginning September 30, launching a liquidation panic.

In a statement released on Weibo, BTC China said that it would immediately stops accepting new account registrations on BTCChina Exchange. The decision was made after “carefully considering” Chinese regulatory bodies’ Sept. 4 announcement on preventing risks associated with token fundraising. A google-translated version of the statement:

China will stop all trading business on September 30th

 

Dear Bitcoal Chinese users: According to the September 4 issue of the "People's Bank of China Central Office of the Ministry of Industry and Information Technology Ministry of Industry and Commerce, China Banking Regulatory Commission, China Securities Regulatory Commission on the prevention and treatment of the risk of the issuance of the currency," the spirit of the document, adhering to the protection of investment risks, the maximum protection of users

 

The principle of interest, Bit Coin Chinese team by careful discussion, is to make the following decision:

 

1. Bit currency China's digital asset trading platform today to stop the registration of new users;

 

2. September 30, 2017 Digital asset trading platform will stop all trading business.

 

Beitou China's pool (pool) and other business will not be affected, continue to normal operation.

We apologize for the inconvenience. If you have any questions, please contact support@btcchina.com.

And on Twitter:

The immediate result was a sharp plunge in the CNY-denominated price of bitcoin on exchanges like BTC China and OKCoin:

While China no longer dominates cryptocurrency trading - it accounted for nearly 90% of all trading in late 2016 before Beijing launched a series of measures to limit participaton - and is now responsible for less than 40% of global volumes, the Chinese selloff has spooked global markets, pushing bitcoin sharply lower on international exchanges as well like Coinbase, where it was trading at approximately $3,600 last. 

A breakdown of global bitcoin exchanges by volume is shown below:

Also notable: as of this moment, China-denominated bitcoin is trading at about 17,000 yuan or just under US$2,500, indicating there is a nearly 30% arb between Chinese and offshore trading.

This isn’t the first time the bitcoin market in China has come under regulatory scrutiny. In early February, major exchanges suspended withdrawals of bitcoin and stepped up their scrutiny of clients after meeting with the central bank.

Emil Chan, vice-president of the Hong Kong Blockchain Society, said it would be difficult for regulators to outlaw bitcoin trading altogether. “There is no option to restrict cross-border sales of bitcoin. It is a smarter move to maintain the operation of the local exchanges if the central bank’s goal is to minimise the outflow of yuan.”

Still, the virtual currency is up more than six times from a year ago, with some participants convinced the bitcoin market is in a bubble. “In fact, the market was too hot. The action taken is an effective action to cool down the global cryptocurrency market,” said Chan.

Meanwhile, Leonhard Weese, president of the Bitcoin Association of Hong Kong, said if China continues to toughen up on regulations to restrict growth in bitcoin, it may drive the business to the city.

“People in China will be more careful about marketing these events, and a lot of that marketing activity will come to Hong Kong in the form of conferences and communities,” said Weese.

It remains to be seen if Chinese bitcoin fans will simply switch to other OTC/bilateral forms of trading, or simply take their trading to neighboring Japan and South Korea which remain eager advocates of trading in the crypto space.

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MillionDollarButter's picture

Please don't do that thing where you blur the numbers on the graph to hide the actual scale.

Looney's picture

 

Satoshi Madoff is laughing his ass off.   ;-)

Looney

jcaz's picture

....And it's over.  Shocker.

Ghost of PartysOver's picture

And you thought crypto's were beyond the long arm of goverment.

BTW, this is all about the Chinese Gov trying to stop asset flight out of China

BaBaBouy's picture

R    r   r  r  r r r r rrun ...

loves the truth's picture

They cant let the metals go up now can they???   scum bags.

BaBaBouy's picture

Its still showing @3600 in USD's ...

Is the USD soo Bad ???

bwh1214's picture

Bitcoin has proven its trading will just move elsewhere. 

Bitcoin Videos

Duane Challenge Accepted, and a Wager

 

Bitcoin Prehistory
BaBaBouy's picture

Watch out when it breaks 3K...

That will set off the snowflakes and millenials...

mtl4's picture

I warned of this over and over........you can hold them all you want but if gov't makes exchange illegal the value plummets.  Blockchain tech will continue to evolve and is here to stay though.  I wouldn't be surprised if gov't forces people to trade bitcoin through banks later given Dimon's comments.

tmosley's picture

Hahaha, idiot peanutz dancing in the streets again, claiming its over.

China just gave away the keys to the fucking kingdom. They could have been a crypto superpower, but instead they are going to force their own citizens out of it, making them give it away to westerners (like me!) at vastly discounted prices.

What peanutz don't understand is that if this was anything like the end of Bitcoin, it would be down more like 99%, not down to 15% higher than the last high. A LOT of people, myself included, have been calling for the gap to $3000 to fill. Well, looks like we are going to get our fill.

Keep those EMP dreams alive. They are your only "hope", oldbugs.

Burltron's picture

The Chinese are the biggest cucks to their government.  Submit and obey.

TeamDepends's picture

You hater cucks should be railing against communism, not bitcoin.  You should be decrying the totalitarian crushing of free markets, not honest attempts to circumvent fiat dead-ends with decentralized cryptos.

Creepy_Azz_Crackaah's picture

DAMN!! Are all of my local retailers going to stop taking bitcoin "currency" from me for their products now?

Oh, wait.  None of them have been taking bitcoin anyway.  It is a currency. Just nobody takes it.  Seems more like a speculation vehicle...

MANvsMACHINE's picture

That's funny.

But...but, someday they won't take your USD either.

overbet's picture

Another person's post:

"This 'telephone' has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us." - Western Union internal memo, 1876

 

"Rail travel at high speed is not possible because passengers, unable to breathe, would die of asphyxia." - Dr. Dionysius Lardner, 1830

 

"I think there is a world market for maybe five computers." - Thomas Watson, chairman of IBM, 1943

 

"Everyone acquainted with the subject will recognize it as a conspicuous failure." - -Henry Morton, president of the Stevens Institute of Technology, on Edison's light bulb, 1880

 

"The horse is here to stay but the automobile is only a novelty—a fad." - -The president of the Michigan Savings Bank advising Henry Ford's lawyer not to invest in the Ford Motor Co., 1903

 

"Television won't last because people will soon get tired of staring at a plywood box every night." - -Darryl Zanuck, movie producer, 20th Century Fox, 1946

 

"No one will pay good money to get from Berlin to Potsdam in one hour when he can ride his horse there in one day for free." - King William I of Prussia, on trains, 1864

 

"The wireless music box has no imaginable commercial value. Who would pay for a message sent to no one in particular?" - -Associates of David Sarnoff responding to the latter's call for investment in the radio in 1921

 

"How, sir, would you make a ship sail against the wind and currents by lighting a bonfire under her deck? I pray you, excuse me, I have not the time to listen to such nonsense.” — Napoleon Bonaparte, when told of Robert Fulton’s steamboat, 1800s

 

“The idea that cavalry will be replaced by these iron coaches is absurd. It is little short of treasonous.” — Comment of Aide-de-camp to Field Marshal Haig, at tank demonstration, 1916

 

"I must confess that my imagination refuses to see any sort of submarine doing anything but suffocating its crew and floundering at sea.” — HG Wells, British novelist, in 1901

 

"It's worse than tulip bulbs. It won't end well. Someone is going to get killed." — JP Morgan Chase chief executive Jamie Dimon, on Bitcoin, in 2017.

 

BLOTTO's picture

A sell off doesnt = death.

booboo's picture

The tide goes out when holders begin the process of converting it into physical assets (peanuts, coffee, sugar, fuel, tampons IN MASS) yes right now it's just a spec (I wouldn't even call it a vehicle since the velocity/direction of bitcoin is all one way..making walnuts feel rich as they hoard 1's and 0's

Manthong's picture

 

 

Well the good news is that Satoshi had an affair with Ms. Watanabe and their offspring went to Shanghai and formed a brokerage firm to trade currency.

spanish inquisition's picture

None of those 1st gen items exist anymore. As it will be for bitcoin, which has already been fiated... Or forked. Random number strings ultimately have no value.

spanish inquisition's picture

The globalist wet dream block chain provides is that our ssn are replaced by a block chain. Then every interaction between people is logged as a because that is the law.. So when a kindergarteners gives a friend a cracker during lunch, it can be properly taxed.

Pool Shark's picture

Even a casual observer with no knowledge of Bitcoin's 'inherent value' could look at the following chart and conclude without doubt that it is a bubble:

http://quotes.goldseek.com/charts/bitcoin/1year.php

Or, how about this one:

http://quotes.goldseek.com/charts/bitcoin/5years.php

 

Teja's picture

Wrong, Bitcoin is not _a_ bubble, it is multipe bubbles, a chain of bubbles. They obscure the growing use of it to become independent of banks, foreign exchange controls and similar, which drives the fundamental growth.

Crashes of maybe 35-50% or even more seem to be a general property of Bitcoin. They of course slow the adoption, but that cannot be avoided - stable growth proportional to the growth in real world use is not attainable for Bitcoin.

ICO's, on the other hand, are mostly pyramid schemes or similar, same as many altcoins.

tmosley's picture

Calling bitcoin a "random number string" is like calling a tally stick a "random stick". It was MONEY for more than 700 years, and formed the foundation of the BoE.

Sorry, child, but ledger money has value, no matter how hard you wish it didn't.

Mango327's picture

You forgot the quote by eminent DOOM-TWAT, Paul Krugman, about the viability of the internet vis a vis the fax machine. After all, the internet never had any boom and bust cycle, and it eventually went away. Bitcoin's price moved down, therefore the internet and Bitcoin don't exist. America outlawed drugs, and all the drugs went away. Goodnight, goldbugs, sleep well in your adorable delusions of righteousness. They will serve you well.

ET's picture

 

 

 

 

The four most dangerous words in investing are 'This time it's different.'


Sir John Templeton

 

 

 

Gold is money.


JP Morgan

 


overbet's picture

Anything we agree has value, has value. I trust the user base of BTC far more than I trust .gov. The dollar is on an unstoppable degradation.

Maybe it is gold, silver, btc or something else that will hold or increse in value against this degradation. I dont know, but I like the limited availability and getting into anything with this potential in its infancy is an easy call. If it goes to 0, it wont stop me from investing in another alternative in the future.

When I started reading about btc it was around $10. I tried to buy some, but the process was a pain in the ass so I moved on at the time. When I started actually buying it the price was around $200. I will buy more on these dips and I hope for an even greater discount.

I am not throwing my net worth into it, but I will allocate 10-15% which is less than I allocate to metal. One thing I wont ever be buying or sitting on too long is the US dollar. Aside from what I need for living, I cant get rid of those fast enough. 

Justin Case's picture

I trust the user base of BTC far more than I trust .gov.

Do you bother to vote.

overbet's picture

I do vote and donate out of hope, but surely in vain. If you think that will stop any of the lawlessness or theft then you are being optimistically delusional. 

Yukon Cornholius's picture

Remember all those people voting for a wall to be built and lower taxes? And now...deals with demicrats.

Voting gives you AIPAC.

Uchtdorf's picture

Take a look at what this prescient guy, Kevin Kelly, one of the co-founders of Wired magazine, was saying in 1995!

http://kk.org/mt-files/outofcontrol/ch12-b.html

 "Cypherpunks intend to level the playing field against centralized computer resources with the Fax Effect. If you have the only fax machine in the world it is worth nothing. But for every other fax installed in the world, your fax machine increases in value. In fact, the more faxes in the world, the more valuable everybody's fax becomes. This is the logic of the Net, also known as the law of increasing returns. It goes contrary to classical economic theories of wealth based on equilibratory tradeoff. These state that you can't get something from nothing. The truth is, you can."

 

 

Yukon Cornholius's picture

These state that you can't get something from nothing. The truth is, you can."

Still not true. Running the net and BTC takes a hell of a lot of energy, which isn't free by any means.

Utopia Planitia's picture

What you are witnessing are the birth pangs of krypto.  None of the krypto currently in existence meet even a single one of their stated objectives.  If they did they would not be so easily manipulated.  This move by the Chinese was one that did not even take any intelligence to enact. There are an unending string of more sophisticated things they could do remaining.

U4 eee aaa's picture

and conversely the death throes of central banks. They know the jig is up. If they didn't feel threatened they would be ignoring such a 'tiny' market

Creepy_Azz_Crackaah's picture

"These Beanie Babies are going to make me RICH!!!!" - Aincent ZHer.

overbet's picture

"Gold/Silver is going to make me RICH!!!!" - Every ZHer.

 

You make a lot of comments I agree with, but.....

How many of your local retailers accept gold?

83_vf_1100_c's picture

No, patently false. AU, AG are a good store of value. In dollar terms they hold their value for a long tome while fiat paper, tulips, beanie babies come and go. If AU were to go to $50k over the next few months stackers will not suddenly be wealthy. They will be able to buy that$100 loaf of bread. Fiat owners will be burning their dollars to stay warm. I do not see crypto worthiness in a hyperinflationary situation.

But back to the China situation. Why are the Chinese dumping bc? They can keep it on a paper wallet and spend it later, right? Or, is it tied up in the exchange like money in a closed bank's vault? For those dumping it, whi is buying it, ther Chinese or other nationalities? If crypto can't simplify itself so us serfs can understand it then it will remain in the realm of speculators.

Creepy_Azz_Crackaah's picture

How many people claim that gold is currency? I don't.

Bitcoinistas claim that bitcoins are currency.

Look, I really hope that all of the ZHers with bitcions do well. But it won't be allowed to happen that a guy in his mom's basement (Satoshi?) is allowed to own one eighth to one forth of ALL bitcoins if it is to become a highly functional currency. Banks have governments with guns backing them. Mom's basement dwellers don't.

Bitcoin is a speculation vehicle. It's marketed as a currency (so I ask when I can use it as a currency at my local stores - bad question, apparently). It is marketed as a gold coin (see bitcoin graphic). And it is marketed as the future of currency. But banks and governments won't be buying bitcoins (currency) from Satoshi to get their currency.

Blockchain might be the future of transactions but it won't be through any of the hundreds of cryptos currently coded in people's mom's basements.

detached.amusement's picture

"My calculations have proved beyond a doubt that human influences have well overtaken the sun as the primary driver of earth's climate"

-James Hansen, circa 2003 or so

 

lol...and

"my calculations show that solar cycle 24 is going to be an absolute rager that, in addition to man's co2 input, is going to push the earth past its tipping point of ever being able to recover from, it will be an absolute catastrophe."

/amputates leg from slapping knee so hard

Herd Redirection Committee's picture

What you have to understand about China (just like the US and EU) is that they have two sets of rules, one for the elites and one for the rest of them.  Bitcoin was allowed as a vehicle for money laundering by the elites, to evade capital controls and get their money out of the country.  But now that every Wu, Jin and Liang has heard about it, it will be restricted.

Its not that hard to figure out.  And people will soon realize how much of BTC's demand was Chinese moneylaundering/capital control evading demand.  A lot.

If you all of a sudden develop a version of Bitcoin that is properly anonymous, and can be redeemed in physical gold on all 6 continents, well, now you are talking.  The (blockchain) technology does have its uses, but that doesn't mean it has been properly harnessed YET.

tion's picture

It's getting built but I don't believe in full anonymity anymore and neither should you.

BurningBetty's picture

All those quotes cement the notion that human mind is primitive but what's different between those quotes and bitcoin is that we are talking about real assets being created in those quotes while btc is just 0 and 1s in a computer. An algorithm and tech that can be duplicated endlessly (creation of unlimited cryptocurrencies). That is why gold and silver are supreme in every way no matter what people believe. It's not just limited but you can't even duplicate it or make more of even if you wanted. Making it, as Greenspan cited; THE only premium currency there is! 

I am not saying that blockchain may not be the future but when we know for a fact that majority who invest in BTC and other cryptos are there for the profit and not its simplicity. I know of people who have invested several thousand $ in ICOs because it's "given" that the price will double/triple/quadruple etc within a year. Please tell me that this has nothing to do with greed and trying to get something for nothing? Early BTC users attempt to sugarcoat this but the fact remains; so far Btc and other cryptos have been nothing more than a fad, a get quick rich fad. 

And again, not saying the cryptos will vanish but there is a possibility the blockchain will look completely different to what today's cryptos offer. Kind of like the collapse of dotcom bubble. From the ashes something better came.

ejmoosa's picture

Betamax was first to market in November 1975, and was argued by many to be technically more sophisticated in recording quality.

 

(and it's gone)

tmosley's picture

Yeah, it didn't take hold like BTC has.

ejmoosa's picture

Let us know when Bitcoin traders quit taking the dollar.

Buckaroo Banzai's picture

"Oh, wait. None of them have been taking bitcoin anyway. It is a currency. Just nobody takes it."

BitCoin is internet currency for internet transactions. Amazon accepts it, as do thousands of other internet retailers.

But of course, what future does Internet commerce have? It's probably just a flash in the pan.

BlindMonkey's picture

I'm going long on the return of the door to door salesman.

tmosley's picture

Not good enough for the oldbugs. They want donkey cart caravans--Fallout style.

BlindMonkey's picture

Thanks for reminding me I need to start stacking caps.