China’s two largest bitcoin exchanges, Huobi and OKCoin, said on Saturday, Sept. 16, that they will halt all trading services for local customers – reports Quartz.
Throughout the past two weeks, China has been dominating the news headlines due to the government’s official ban of initial coin offerings accompanied with announcement of its plans halt of all crypto trading on domestic exchanges.
On September 15, the plans translated into reality as all Chinese cryptocurrency exchanges had finally received the official instruction from the country’s authorities stating that they have to cease the registration of new users immediately. The instructions were signed by the Beijing city group in charge of overseeing digital finance risks and dispatched online.
A day before, on Sept. 14, Shanghai-based BTCC, one of top-three bitcoin exchanges in China and one of top-five in the world, announced its intention to cease its China-based trading operations starting from September 30.
Announcements of the other two of the top-three Chinese exchanges Huobi and OKCoin’s stated that their service closures would only cover yuan/BTC crypto trading. In fact, that meant that Chinese customers could still trade one crypto asset for another on the two exchanges.
The situation now seems to have changed with that possibility gone, as Huobi and OKCoin’s latest announcements put an end to crypto exchange markets in any form in China.
Needless to say, that the changes affected bitcoin prices.
On Sept. 15 in response to Huobi and OKCoin’s initial statements on their trading suspensions bitcoin price fell quite rapidly and was traded below $3000 level, according to the CoinMarketCap. As for exchanges’ prices, Bitcoin was trading at about $2904.64 on OkCoin, $2887.97 – on Huobi, and $2908.37 – on BTCC.
All in all, the price of bitcoin has fallen more than 20% since the start of this month amid China’s crackdown on cryptocurrency trading.
Nonetheless, Rob Viglione, co-founder of ZenCash, approved of Chinese decision stating:
Already, we’ve seen about $60 billion in value wiped from the peak earlier this month, but there is a silver lining that may be hard to see through the clouds: regulators are starting to provide some clarity, and even if new rules aren’t ideal, they’re better than the uncertainty of potentially inferior regulation.
Jean-Yves Sireau, Binary.com Founder and CEO, also feels optimistic about crypto market’s future despite mostly negative price movements:
In recent months, two things happened: many new investors entered the Bitcoin world (evidenced by the fact that Coinbase has reportedly opened more than 30,000 new accounts per day) and that many Forex brokers started adding Bitcoin/USD trading to their platforms. All these new traders came into Bitcoin at prices above $4,000. When the bad news from China emerged, it created panic and many of these inexperienced new traders started selling. I am confident this is a rout and that the market will recover and hit new highs later this year.
Jason English, VP of Protocol Marketing at Sweetbridge, sees recent China’s decisions from a different perspective:
China is practically building a cottage industry for mining and exchanging bitcoin and other cryptocurrencies, so it is hard to believe that they intend to exit a market with so much potential upside. Even the apparent ban on ICOs seemed to be more of a stopgap in order to get some policies in place. If anything, this example shows the volatility of the space and that some market-makers can likely take advantage of an unclear news cycle to create a sell-off and buy back opportunity.
In one thing Mr. Sireau is certainly right: bitcoin price rebounded from $2,900 back to $3953 at press time, as Chinese government provided OKCoin and Huobi with the possibility to operate until the end of October.
Now that cryptocurrency trading in China has been shut down, more of the country’s exchanges and traders are moving operations overseas.
Both BTCC and OKCoin’s crypto exchanges for non-Chinese customers will continue to operate.