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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onthedeschutes's picture

I will admit the only thing I can prove is that you are a flaming douchebag.  To see my proof...just read your comments.

ElTerco's picture

It can't become a mainstream tool. The Central Banks can't handle a petabyte per day blockchain growth rate, which would be necessary if it were picked up by the world.

ky8's picture

With the federal government’s Black Economy Taskforce final report next month, the head of the corporate watchdog has weighed into the debate with an set to hand down its ominous prediction.

Speaking to the The Australian Financial Review on Monday, ASIC chairman Greg Medcraft predicted traditional bank accounts may be unnecessary within a decade as central banks begin issuing their own Bitcoin-style digital fiat currency.

                                    

silverer's picture

Just what the banks needed. A competing currency that represents nothing, is backed by nothing, and can be created by anybody for almost nothing. Yep, the central banks sure don't want to give up 100% control of that, do they?

buzzsaw99's picture

there is no bitcoin only zuul.

Hongcha's picture

Yes; or Moloch.  Tried to warn y'all.

dumbhandle's picture

AXA using Ethereum public chain in new app. Uses an oracle? First major corporate app I have heard about that does not use a private chain.

debtor of last resort's picture

What did they think? Me pay $4600 for Satoshi Sperms?

Falconsixone's picture

((((Sounds Intense))))

Fahq Yuhaad's picture

Bid or ask? Is there a bid?

Bill of Rights's picture

Tmosley fan boy sold tho Im sure...

tmosley's picture

Of course, you'd have to be an idiot not to.

ihateclowns's picture

Thats what all the idiots that bought in at 5k said

Nature_Boy_Wooooo's picture

That's a pretty ridiculous comparison.

Fahq Yuhaad's picture

Buying is easy -- just throw your fiat at Coinbase. Selling more than trivial amounts? A different proposition entirely.

Anopheles's picture

The exchanges are now having a liquidity crisis. Exchanges can only pay out cash that they collect from people paying new money into their system when they buy new bitcoins. 

They can only attract new purchases of Bitcoin by deeply discounting the price.

This is exactly what I said would happen a week or two ago when there's a run on exchanges.    People told me I was wrong.  I've got the last laugh...

 

tmosley's picture

No, you completely misunderstood the situation, then and now. There is no liquitity crisis. It's just a bunch of chinks giving their bitcoins away to Japs, gooks, and soon, this American. I'm a buyer below $3100.

culater's picture

Don't call them Chinks, they don't like that.

It's a big orchestrated FUD campaign to create a vacuum and grab more Bitcoin and trickle down the alt coins, rinse and repeat.

The volatility actually is a liquidity problem, still very easy to exploit by manipulators of all trades.

Its been a war from the start, going on for years. Hold on to your tokens.

Cutter's picture

This reminds me of Jim Cramers famous call on March 11, 2008 that there was no liquidity crisis at Bear Stearns and the company was fine. Over the next two days Bear's stock fell 92 percent and the company ceased to exist.

May not be over the next two days, but your call will end like his.

tmosley's picture

Next year when BTC is over $10K, remind me to laugh at you.

Cutter's picture

I will. But if it goes the way I predict, please extend me the same courtesy.

tmosley's picture

You can't possibly expect me to remember a nobody like you a year from now.

DjangoCat's picture

Bear Stearns went bust because it could not pay its debts.  Stock went to zero because it represented a bankrupt company.  There are no debts in Bitcoin, it simply is.  If people use it, it has value.  You may think the world will turn away from Bitcoin, I disagree.  We have a market.  I will buy all you have for $1,500 here and now.  Get out while you still can. LOL

DC Beastie Boy's picture

Ok go long at $3100 on 25:1 leverage let's see where that gets you.

It's blowing through fibos and bids are being pulled.

BTC is in complete free fall to $1800 there's no support.

The Chinese sure as fuck ain't buying.

I'm still short with my foot on the accelarator.

DC Beastie Boy's picture

Ok go long at $3100 on 25:1 leverage let's see where that gets you.

It's blowing through fibos and bids are being pulled.

BTC is in complete free fall to $1800 there's no support.

The Chinese sure as fuck ain't buying.

I'm still short with my foot on the accelarator.

Sizzurp's picture

You are brilliant. You must be a banker.

silverer's picture

At least for the people that hold Bitcoin, they have little else to worry about aside from volatility. Or do they?

https://www.databreaches.net/bitcoin-anonymity-over-united-states-govern...

.

cherry picker's picture

This is really the first battle between government and personal liberty.

I was never a crypto fan and most players in the game were in it to grab as much fiat as possible.

I never agreed to allow government to control or dictate where and how I make purchases or sell goods or services. That is no one's business but mine and who I deal with.

Crypto was an alternative to cash transactions which soured quickly enough when banks and government suspected a loss of control over you and I.

 

Sizzurp's picture

Funny seeing all the ZH comments cheering for statist authoritarianism. The problem is not bitcoin. The problem is government reaction to bitcoin.

0hedgehog's picture

That is what was always the problem. Sound money is in your pocket.......not your cyber wallet! It's far easier to control currency from a screen than it is from house to house. Cashless society? Bitcoin plays right into that game.

Sizzurp's picture

The statists will make an enemy of gold as well. Trust me, if gold really ramps, they will be calling for draconian wind fall taxes.

0hedgehog's picture

If it's in your posession and it is used as money, they will have a long hard job trying to find it in every household.

DjangoCat's picture

Definitely worth the effort in a crashing police state society.

DjangoCat's picture

Or sieze it, as they have before.  Civil Asset Forfeiture maybe.. How did you come by that gold? Sir... We'll have that.

the-proles-square's picture

I would agree with that and add that NOTHING happens by chance today, other than you maybe stubbing your toe on the bed post this morning.  It should be obvious, but the new generation has been so well indoctrinated and conditioned so their reasoning, critical thinking and decisions are based on what the media tells them.  Most anyways.

There will come a day when they look back and say, 'wow, I can't believe we gave the government the full control over counting our money (credits) for us and telling US how much we have.'

the-proles-square's picture

All the millinials who sold themselves short are now heading for the local 'Human Health and Services Dept' to get their welfare, which will be deducted from the retirement accounts of those cheering on the loss. The people encouraging the loss of money from the millinials pockets are screwed either way. 

Cutter's picture

We are not cheering on "authoritarianism" nor do we want to see you lose money, at least I don't. We are trying to provide you ground truth and pull you out of this world of fantasy, that you can overthrow the world order with ones and zeros.

But you guys don't listen.

Sizzurp's picture

I own more PM than BTC. Nothing wrong with having both.

RedDwarf's picture

This idea in your head that people who own crypto never also own physical is the fantasy.  I own gold, silver, and crypto.

Secondly there is nothing fantastical about ledger based money.

Lego Brave's picture

Divide and conquer. Crypto people hate sound money people.

2 birds with 1 stone.

Meh. I get the cheap physical stuff cheaper longer. 50 years left. More crypto please!

tmosley's picture

Read the comments from the peanut gallery. Crypto people aren't the ones threatening to call the fucking SEC on the oldbugs.

you_are_cleared_hot's picture

OK John McAfee, remember your bet??? I have a suggestion for you: Perhaps you could skip the eating of your junk and just cut it off and shove it up your a$$...but please spare us the "Crying Game" visual.

 

For all you fools that bought into this...Sell Mortimer!!! Sell!, Sell!,Sell!

Fahq Yuhaad's picture

Would you like a side of fries with that dick, sir?

Rick Cerone's picture

China to issue cryptocurrency backed by oil soon. Bitcoin is unwanted competition.

culater's picture

Probably a BRICS currency, fungible for gold, oil, cny, rubels ... 

Venezuela will be interested.