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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Sebastianbelle's picture

I admit, the volatility of Bitcoin is too much for me and I do not one any. However, the idea of decentralized banking is utterly delicious. Imagine, not having the be a slave to the central bankers and their dark money that cause bust and booms? I feel that Bitcoin equals the playing field. I would do if I knew with utter certainty that the block chain could not be hacked but from what I have read people's accounts have been tampered with. I was thinking of attending the Nexus Conference in Aspen with Jeff Berwick, Doug Casey, Peter Schiff, Rand Paul. Basically all the doom and gloomers! :-)

Nature_Boy_Wooooo's picture

Exchanges can be hacked not Bitcoin. An exchange is a trading platform where you can trade buy/sell/trade Bitcoin other crypto currency. Bitcoin is not an "account" it is a value stored in a highly encrypted private key. I would research bitcoin wallets before investing. Hard wallets (Ledger Nano S/Trezor)will be your most secure option, cold storage (stored offline) is your best protection. You can leave a small amount in a wallet like Mycelium for quick instant payments direct from your mobile device.

Ink Pusher's picture

If it's so bloody profitable and allegedly stable, then why were they forced to HALT trading?

Don't they have any faith in their glorified over-hyped unsecured debit card system products?

 

kavabanga's picture

Whats with the panic here? The highlighted rectangles are the fractals where the same pattern has occurred over and over on the smaller time frames BUT THE OVERALL BIAS IS STILL BULLISH . Enough of this mumbo jumbo. It's clearly pointing downwards, but have people never traded before? All these crypto traders seem to have never traded anything other than bitcoin . This is normal. On the daily, we are still on an upward trend. It's just the smaller time frames that are showing downside momentum. China bans ICOs and starts regulating everything crypto. Well duh, they are a communist country after all. This has gone too global and they do not fully control the market. Jamie Dimon has something negative to say about bitcoin because it clearly effects his business. He's also the same guy accused of fraud. Sounds fishy to me. Bitcoin is going nowhere. It's died nearly 160 times and revived. The bubble has already burst many times. This is part of trading so put your big boy pants on and stop freaking out. I will set small buy orders at $3,000 and huge buy orders at $2800.00 depending on the price action. Thats where I believe it is heading. 

 

https://www.tradingview.com/chart/BTCUSD/IEGgArfA-BITCOIN-BUY-THE-DIP-Wh...

Making Merica Great Again's picture

Bitcoin is a bubble that's gonna burst., it's a fad, a scam, , it's going back to 3000$...

See? It is crashing...

DjangoCat's picture

Bitcoin is a bubble, or USD is a fraud.  You choose.

ZKnight's picture

I wouldn't say Bitcoin is in a bubble. With less than 21 million in existance the upside is massive. The USD is a fraud certainly and created out of thin air at will by the banksters, it is a tax on the poor (devalues their savings).  Bitcoin is a major threat to Roshschild owned Central Banks, so we expect attacks by the Establishment. I personally like these attacks, it is a buying opportunity, can make quick easy money selling high, buying low.  Only weak hands sell when it dips as they don't understand the drivers behind Bitcoin.

I also make overseas payments in BTC. Extremely fast and cheap, try do that with Government Fiat!

cherry picker's picture

There is one undeniable truth to crypto.

If it was truly a currency it wouldn't be valued in fiat.

When crypto people crow about bitcoin a week ago it was almost worth $5 grand a coin.

However how many loaves of bread can crypto buy last week and how many can it buy today?

I don't see it as a currency until crypto is no longer measured in fiat but in its own worth against products or services which can be traded for it.

DjangoCat's picture

You are quite correct, and it will be some time before the currency is in general use.  However, I would point out that the phenomenon is still very young and at its core, it is a revolutionary idea which will take over the world.

Furthermore, it is poised to replace the USD and other fiat currencies which are in the teminal phases of exponential expansion.  Where does USD go from here?  Not very far.

koan's picture

Blame the Jews.

Cutter's picture

US Government, EU, Japan, and Russia taking similar action in 3...2...1

Yellow_Snow's picture

The 'oldbugs' are so happy!  Dancing in the street, partying with Jamie Dimon.  We will BTFD

aloha_snakbar's picture

Tomorrows headline will read..."Bitcon soars because some Chinese kid learns how to spank hank"

All you cryptos might want to learn how to speak Chinese, so you can communicate with your new puppetmasters...

Fake Trump's picture

Wow, 35% is by any definition is a CRASH. 

Conax's picture

Whatever the Chinese do they do all at once and together.

It's like a big glommation. Like a flock of blackbirds wheeling and turning.

Chairman say bitcoin bad....We're out, Guailo!

Juliette's picture

That escalated quickly!

Father ¢hristmas's picture

If you are not buying shit off the black market,  BTC is a ponzi scheme, like the stawk market, or pensions.

"making them give it away to westerners (like me!) at vastly discounted prices."

I'm gonna whoop your motherfucking ass in the FEMA camps.  

 

RedDwarf's picture

"If you are not buying shit off the black market,  BTC is a ponzi scheme, like the stawk market, or pensions."

BTC, the stock market, and pensions are not Ponzi schemes.  Furthermore even if it was a Ponzi, it would not stop being a Ponzi just because you used BTC to buy shit on the black market.  You're spouting gibberish.

Fiat fractional reserve money made with the creation of new debt (newcomers borrowng) is the Ponzi.

Still Losing Money's picture

so bitcoin and tulips are the same after all because this time it ISN'T different. amzing how someone flips an electronic switch and your supposed great electronic currency goes POOF, gee, whodathunkit

grasha87's picture

I have created a free market currency that helps alleviate unemployment and recessions that the Fed creates, and it's based on Say's law: https://bunky1787.wordpress.com/2017/09/06/the-wallark-neo-scrip/

SRV's picture

Sheep led to slaughter again... a ponzi needs plenty of fools to feed the millionaires at the top of the pyramid.

Puzzling thing is why anyone who got in early wouldn't cash in on the opportunity of a lifetime... and of course kill the price for good.

Mr Global's fingerprints all over this thing...

Anteater's picture

You can still trade BTC for a Starbucks reward card,

then stand out on the street corner and try to sell the

card for cash, to buy gas to get back home. WINNING!

Robert Trip's picture

Going to be plenty of greedy bag holders on this scam.

Looks good on them.

grasha87's picture

I have created a free market currency that helps alleviate unemployment and recessions that the Fed creates, and it's based on Say's law: https://bunky1787.wordpress.com/2017/09/06/the-wallark-neo-scrip/

White Devil's picture

Bitcoins are Shitcoins

Fake Trump's picture

Bitcunt is better. At least you have a cunt to fuck.

a Smudge by any other name's picture

today on zh chat:

If i speak all  wisdom and have not love i am a clashing cymbal.

ogretown's picture

Then again, what was it that Confuscious said, "Mirrors cannot spread noise."

ZKnight's picture

Buying opportunity!!!  This is just like when G&S are attacked, but more profitable.

Tulak's picture

who wants popcorn?

Fake Trump's picture

A glass of wine for me please.

FreeShitter's picture

Reading these comments will give you aids and cancer. When BTC hits 5k and beyond, what will all of you say again? This is crypto, if you can't handle 30% drops, then you dont deserve 500+ % gains.

moorewasthebestbond's picture

Fuck China.

 

China shuts down local exchanges for *the harvested human organs market*... why not shut down Bitcoin exchanges?

Fake Trump's picture

Don't blame China. Blame yourself for being an idiot to invest in it. It is a con game from day 1.

RedDwarf's picture

To all those saying "I warned you!" and "This is the end of bitcoin", you're looking at this all wrong.

It is not that BitCoin has gone down an incredible 35% on news China is going to shutter exchanges and ICOs and likely ban crypto all together.  It is that BitCoin has ONLY gone down 35% on such news.  That is resiliency.  Not only is it not over, this proves how global BitCoin actually is.  Furthermore it is highly unlikely bitcoin will stay down.  BitCoin will eventually recover these losses.  This is a gift horse buying opportunity.

In the long run this is not negative for BitCoin, it is negative for China.  This is just more stupidity from the Communist Party trying desperately to prevent capital flight out of China and to control every tiny aspect of their economy.  It's just going to be a failed attempt to enforce capital controls.  Eventually they'll turn into North Korea, or they'll give up and embrace markets again.

tmosley's picture

It's insane that such a move only knocked the price back to where it was a month ago. China is what? A fifth of the human population?

Infinite QE's picture

And probably 90% of the "trading" volume these days. LOL.

RedDwarf's picture

Something like that.  China + India are 37%.

Insatiant's picture

The purchase of bitcoin for USD at exchanges is lit right now:

    http://fiatleak.com/

Some big, big ass buys (i.e. 50+ BTC) going on in North America.  Sure, it could all go to zero and I'm placed for that potential outcome.  But, I agree with tmosley that China made a miscalculation here, which it will regret in the long run.

Cryptocurrency capitalization is the living open source International Monetary Fund. The realization horizon of this varies among people.  If anything, some countries may decide that only large institutions may purchase bitcoin from now on...

Nature_Boy_Wooooo's picture

How long before the Chinese people find a work around and start buying again? Prohibition never works.

Fake Trump's picture

The Chinese are not that stupid. They prefer to buy pork belly as from now. They will just cut loss as though they lost in casinos in Macau. No big deal for them. Money easy come and easy go..The Chinese are born gamblers.

Txpl9421's picture

This is obituary 166.

https://99bitcoins.com/obituary-stats/

 

I think it might be nice if someone actually read what was going on, rather than rely on twitter.

Look for these exchanges to be back in a regulated and controlled manner.  The whole issue is trying to reign in the extensoon of debt to these idiot chineese.

I don't usually stereotype an entire race...but their culture is one frigging greedy one.  Ours is too, but damn, those guys will kill you for a nickel.

 

personal109's picture

If they regulate people will leave.  It's kind of an oxymoron, Bitcoin in China and regulation.  The whole purpose of the operation is the launder as much Yuan out of the country as possible and as fast as possible.  But thanks for the link.

koan's picture

So China "may" close all exchanges, which "may" drive all business to HK, which "may" beg the question why they weren't using HK to start with.

Fake Trump's picture

Hong Kong is part of China. Don't be naive.

artvandalai's picture

ALL YOU BITCOIN BASHERS.... STOP IT!!!

and join my new group. You can vote on the name and here are the three choices.

1) BitCoins Matter

2) BitCoiner's Lives Matter

or c) BitFlakes Lives Matter