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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DjangoCat's picture

Any crypto back by a tangible asset is prone to fraud.  Look at tether.  Supposedly backed by USD, but the deposits of USD were cut off in April, yet the amount of tether in circulation keeps rising.  

Fractional reserve tether = fraud.

The value of crypto is based on the network effect, period.  Drive people out of the network and the value falls, viz. China.

HushHushSweet's picture

Bitcoin is all about greed, fear, obfuscation and power.

There is nothing sound in it.

Only ill-gotten gains.

 

Sizzurp's picture

The real ill gotten gains are when the Fed prints money out of thin air so the political class can have a party at others expense, or the bankers can cover up their fraud.

scatha's picture

It as inevitable, oligarchy will not accept money competition since money control means power in every dimension. So far they allowed cryptos run by Wall Street characters as a game, for gullible hoping to make their huge FED orchestrated losses elsewhere but they are clamping down everywhere even in Russia by regulating cryptos while faking support for it in the name of progress.

Anybody who still want to invest in cryptos should read this honest review of what Bitcoin really is unbiased by speculators and Ponzi schemes pushers AstroTurf who took over industry and will destroy it for bankers.

https://sostratusworks.wordpress.com/2017/06/01/tales-from-crypto-world-...

Of course technology of distributed ledger and block chain will be is already hijacked and used by banking cartel deployed on corporate clouds cutting their own expenses by 99% and customer fees by 5% claiming improved efficiency bullshit.

For Bitcoin to win we need no soft forks but a pitchforks, people, wake up.

0hedgehog's picture

Everybody out of the pool!

DC Beastie Boy's picture

It's gambling and I'm short 25:1 leverage on the way down.  Printing digital money! 

I've talked about this for the past two weeks that BTC would test the gap at $3000 nobody listens.

Trade what you see, not what you think.

DC Beastie Boy's picture

I'm charting that it would bounce at $3400 but after this news it might just sell off below $3000.  Whichever the case, I'll get stopped out at $3400 on the way down for massive profit, then reavaluate.

quasi_verbatim's picture

Clunk, clunk...clunk.

PleasedToMeatYou's picture

 

BITCOIN INVESTMENT TRUST (GBTC) down 50% since the open on 8/31.  Down hard in premarket.  Going to zero? 
Itchy_Balls's picture

Well duh the whole move up has obviously been too frothy and on falling volume. Who did not expect a correction? But the fundamental reality of bitcoin is unchanged. Gov can fight but in the end will lose. Watch as big banks (gov) continue to malign bitcoin while quietly accumulating positions. They have always talked out of both sides of their mouth. They are not to be trusted. I will continue to accumulate along with them. I do not buy for a quick gain. This is a a long term buy and HODL position. 

Decoherence's picture

Flagless, world money is coming, but it will be SDRs issued by the IMF.  A revolution procured with crypto is fantasy.  

tmosley's picture

Which one already exists? It is the other that is the fantasy.

Decoherence's picture

They exist, but you don't see countries buying oil with them yet.  You don't see them replacing the USD hegomony yet.  I believe that is around corner.  

tmosley's picture

They "exist" as a concept. There is no circulating SDR note. There are plenty of circulating bitcoins.

Decoherence's picture

World leaders want the flagless SDR currency to replace the USD, if for nothing else than it truncates our ability to pay for wars.  It's coming.  

DjangoCat's picture

Bitcoin and other crypto exist to fill specific use cases.  The SDR exists to prolong the fiat ponzi scheme and, as Jim Ricards posits, will probably be the final roll up of the bankrupt central banks.  This does not make it any more durable than the failed fiats it will replace.  It relies on a centralised World Order to make it work.  The cryptos exist outside this authoritarian jackboot order and will emerge out of the ashes of the ponzi promoters as they inevitably crash and burn.

Decoherence's picture

They exist, but you don't see countries buying oil with them yet.  You don't see them replacing the USD hegomony yet.  I believe that is around corner.  

DjangoCat's picture

Man t, you are getting beat up hard here.  My sympathies.

lester1's picture

I'm out. BTC is toast.

tmosley's picture

Enjoy buying back in at $30K with the Chinks.

Communists always lose! Not because their system is so bad, but because communists are all losers to start with!

Wrenching Away's picture

tmosley, what do you make of NEO?

tmosley's picture

Probably too strongly linked to China at this point. But I'm not very educated on that particular coin. I don't own any.

BustainMovealota's picture

Methinks thou dost protest too much"
If BTC wasn't a threat there would be no reason for this move.

DjangoCat's picture

Right.  Jamie Dimon threatens to fire anyone in his employ who trades Bitcoin.  Is he afraid or what?

Yellow_Snow's picture

Exactly !!!  If they thought it was a fad they would not have done anything.  Governments respond to threats.

balz's picture

What, bubbles can burst?!

Nature_Boy_Wooooo's picture

Gold sounds like a good alternative other than the fact that you can't transport it easily without having a huge target on your back. I suppose I could buy paper gold to get the government and bankers out of my life. Who would want to be able to fit an infinite amount of money on a flash drive in their pocket when there are such great options with gold?

saldulilem's picture

Of course this may happen ONLY in China, not Japan, South Korea, or United States. Right?

Yellow_Snow's picture

Totally expected, I think most governments will come after it. 

The reason many of us got into crypto's is to get out of government.  It offers the best solution, and certain crypto's like Verge, DASH, Monero, and PivX will soar. 

Thanks to Commie China people will start waking up to the real reasons to own them.  Not these Shitcoin ICO's

cherry picker's picture

In the eighties someone asked me how much I was worth.

"On paper about $12 million " I replied.

That is the problem.  A few years later I was worth $0 on paper and in assets.

Crypto is no different.

bluerivercard's picture

Tmosley

Ignore the haters. BTC was less than 1000 a year ago, this is a minor correction on way up

Can I ask please what u think of JSECoin can be mined using only web browser and can run in background on websites as alternative to Google AdSense

Here is referred link

https://jsecoin.com/platform/?lander=1&utm_source=referral&utm_campaign=...

tmosley's picture

Looks like it generates profits via ads. Seems like a dead duck if so.

Also, bad form to post referrer links in a public forum.

bluerivercard's picture

Appreciate you checking it out.

I like it as anyone can mine using web browser without expensive equipment and it runs in background of visited sites without any ads so less annoying and a welcome alternative to Google AdSense

Thanks again 

Brc

Yellow_Snow's picture

Sounds more like malware to me...  Shitcoins are tarnishing the decent ones bigly

Garciathinksso's picture

libertarian anti-bitcoiners cheering government regulation, too many commie losers on this website now. btw -- real markets sometime fall.

Nature_Boy_Wooooo's picture

They own gold and want Bitcoin to fail so that you will buy gold and increase the value of their holdings. When the fallout comes it's gonna be hard for them to stash their life savings in their ass at checkpoints at $1,300 an ounce.

DjangoCat's picture

Don't see gold rising on this news, Still under the CB jackboot.

The Bitcoin fall is a result of jackboot regulation and Jamie Dimon mouthing off.  Do we like Jamie?

Thought not.

Nature_Boy_Wooooo's picture

I like Jamie Dimon about as much as I like hiding bars of gold in my ass.

coast1's picture

what is "real markets" ?   I am new here and not familiar with all the economic lingo yet, and never heard of a "real market",,,,thx

0valueleft's picture

They said Bitcoal, are they finally realizing what it's true creator is? Nukecoin is an ICO I might look at. This way I have something to fill my coal powered car in the future when the Dems get the wheel again and put the rest of the coal miners on drugs and welfare.

If you let your principle ride on this, you deserve the pain. If you never played you deserve what you got, nothing. Bubbles are all that's left for us outsiders to make money with money now. If you're diehard loyalist you're used to this and understand the contours of the road and if you didn't sell, truth is you haven't lost anything yet, you just didn't realize a speculative profit.

Enjoy the volatility, it should help you remember free markets. I want to give a shout out to JMbullion for taking it on the chin for me this last month.

bjax's picture

Yay it's sale .. what a day !!

Gobble D. Goop's picture

Sell 0 and 1 shaped gold and silver bullion.  Each piece is a bit.  If you buy 8 ounces you'll have a byte. 

Stash it inside a a computer case so the metal detectors can't find it.

Everyone's happy!

peterk's picture

bitcoin is held by weak hands

thats why its a bubble i suppose

 

Only when i see  stocks and commodities being priced in bitcoin, and not bitcoin priced in usd/yen etc,

will i accept bitcoin is a currency. It is not.

 

bitcoin is just the ultimate manifestation of  QE by central banks.

When bitcoin crumbles, it will signify the end of the  centrall banks QE experiment.

 

aloha_snakbar's picture

Poor cryptos... if it werent for bad news, there would be no news at all...

 

"On a long enough timeline, the price for all cryptos drops to zero"

PitBullsRule's picture

Its crashing!  No its sky rocketing!  No, its crashing!  Wait, its shooting up!

Man, its like people don't know what nothing is worth!

Tulak's picture

Is like empty air loaded with shit!