By
Bhushan Akolkar
April 19th, 2024
Rumors about Chinese government’s plans to ban trading of bitcoin and other virtual currencies on domestic exchanges decrease Bitcoin price to under $4150 level.
Contested reports that China plans to ban trading of bitcoin and other virtual currencies on domestic exchanges annulling the whole country’s exchange ecosystem made markets for bitcoin and other cryptocurrencies fall over the course of September 8th till today.
The entire buzz is caused by Chinese news source Caixin, which stated on Friday that regulators are looking to shut down the exchanges, citing no definite sources though.
According to the Caixin, the news about the decision made has already been dispatched to other sources.
At the same time, exchanges in China claimed that they haven’t received any notifications from the Chinese government yet. China’s central bank couldn’t immediately comment.
Given all said above, the trustworthiness of the news reported by Caixin is brought into a big question.
Still, the uncertainty caused by the news, unproved ones, though, caused bitcoin (and the whole crypto market’s) fluctuations. The steepest drop was seen on Friday, when the currency dropped from $4658 to $4084 during the course of the day. Following the fall, token reached the minimum of $3969 on Sunday. Currently, according to the data from CryptoCurrency Market Capitalizations Index, Bitcoin shows the signs of recovery trading at about $4,144 (dropping after today’s peak of $4,261 per token).
CoinMarketCap also reveals that, logical enough, China’s leading bitcoin exchanges, following Friday’s news, are still reporting the lowest prices for the token. OKCoin, for example, trades bitcoin for $3883.41, at press time, Huobi and BTCC, in their turn, are reporting prices of $3892.04 and $3873.40, correspondingly.
Almost all other 397 listed bitcoin exchanges, trade the currency at prices above the $4,100 level (except 13 exchanges that trade bitcoin above $4000).
As it has been mentioned, other cryptocurrency markets have seen notable declines as well. Ether prices, for example, fell from $329 to $289 on Friday, hitting the lowest level of $269 on Sunday. Today ether gained 3,77 percent being traded at $289 at press time.
The total cryptocurrency market capitalization was also affected by the news, which made it fall from $165 billion on Friday to 135 billion on Sunday. Having risen slightly, today it makes $144 billion.
To recap, the rumors about China’s exchanges’ potential shot down were preceded by the last week’s decision of People’s Bank of China (PBoC) to ban Initial Coin Offerings (ICOs) and declare them illegal, asking all related fundraising activity to be halted immediately.
In this relation Vladimir Bakhuteev, co-founder of VR streaming company Prosense, developer of ProsenseLive, stated:
The ICO ban in China wasn’t too unexpected, the main issue is the instruction to return the collected funds. Now its unclear how the mechanism of refunds will be implemented. How quickly projects will be able to repay funds to investors and what will the refund be effected if some of the funds have already been spent on development? Will any measures be taken to those who can not return the funds in full?
Meanwhile, Switzerland, following the desire of governments to control rapidly growing blockchain and cryptographic technologies, takes another way to secure its ecomomy from negative impacts of ICOs . In such a way, Crypto Valley Association (CVA), a non-profit government-supported association founded in Switzerland, plans to establish ICO Code of Conduct that is to be a guideline for the regulation of careful and safety Initial Coin Offerings (ICO).