Bitcoin price tumbles as China orders exchanges to be shut down

Illustration by Alex Castro  The Verge

Illustration by Alex Castro The Verge

For those who are looking to take advantage of Bitcoin and other cryptocurrencies price fluctuations, Some brokers provide traders with instant access to trade Bitcoin, Bitcoin Cash, Ethereum and other cryptocurrencies. China accounts for about 23 per cent of bitcoin trades and is also home to numerous world's biggest bitcoin miners, who confirm transactions in the digital currency.

Bitcoin prices have tumbled over $1,000 over the past month as China clamps down on cryptocurrency. China's central bank said it could not immediately comment.

A draft of instructions to ban Chinese platforms from offering virtual currency trading to customers has been created by the country's central bank after the government spent months scrutinizing the cryptocurrency market.

China is the world's biggest cryptocurrency market, hence the ban on cryptocurrency exchanges and ICOs comes as a shock.

"Trading volume would definitely shrink", said Mr Zhou Shuojifounding partner at FBG Capital, which invests in cryptocurrencies. Bitcoin has jumped about 600 percent in dollar terms over the past year, part of a broad surge in virtual currencies that has fueled concerns of a bubble. The three largest exchanges, OKCoin, BTC China and Huobi, account for 60% of Bitcoin trading in the country. According to bitcoin market data provider Coin Dance, demand toward bitcoin in over-the-counter and peer-to-peer bitcoin markets such as LocalBitcoins has actually increased over the past two weeks. "Just 15 percent of global bitcoin trade against Japan, Korea, and the US, which equal to 80 percent", said Kikvadze. With China being such a huge country, and one of the biggest Bitcoin miners in the world, it's no wonder that the price dropped significantly.

Prior to China's most recent clampdown on Bitcoin and other cryptocurrencies, Bitcoin had been soaring as investors grew more optimistic about the future cost and speed of transactions.

"Whenever you start to hear about Hong Kong taxi drivers becoming millionaires from buying bitcoin, you start to think this is not necessarily driven by fundamentals", he said.

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