Bitcoin Value Drops After Reports of Chinese Regulation

BTCC was not banned by the government they have shut down voluntarily. Other Chinese exchanges are operating normally

BTCC was not banned by the government they have shut down voluntarily. Other Chinese exchanges are operating normally

The collapse extended to as much as 30 percent this week since China began sending stronger signals of a clampdown on September 8, making this the biggest five-day decline since January 2015, when it traded at around $200.

The nosedive comes after reports claim China plans to stop exchange trading of cryptocurrency by the end of September.

The Leading Group has also instructed exchanges to in effect ringfence user funds by putting them into a separate bank account and to close all other company bank accounts by 20 September, and making arrangements for customers to be able to withdraw their deposits.

Chinese news reports that two of the country's largest exchanges have been given an extra month to operate domestically. Without access to domestic bitcoin exchanges any longer, numerous flourishing mining operations in China may close down or switch to other cryptocurrencies as a central focus.

A withdrawal freeze, which lasted until the beginning of June, meant that customers could trade bitcoins, but were unable to remove their holdings from the Chinese exchanges.

Jamie Dimon, chief executive of JPMorgan Chase & Co, also came out strongly against bitcoin this week dubbing it a "fraud", and adding that it will blow up.

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Till recently, Bitcoin and other crypto-currencies were hailed as something that would usher in a new world order for the monetary system and challenge the establishment, including global central banks.

Digital currencies are being developed by authorities such as the Chinese central bank, while tokens were stateless and did not have sovereign support.

Huobi and Okcoin made similar announcements on Friday, stating that they are closing on October 31. According to Bloomberg, the cryptocurrency has fallen around 28% this week. For example, four of the world's largest Bitcoin mining operations are based in China. The exchanges also need to announce today the schedule to stop the trading of all virtual currencies and publish it at their websites.

Having hit record highs just weeks ago, bitcoin's boom has since abated as the currency feels the heat from heightened regulatory attention.

An expert in bitcoin at Westminster Business School, David Coker said it was surprising that Dimon attacked bitcoin as JP Morgan was working on its own cyrptocurrency called Quorum.

Bitcoin and newer rivals like Ethereum and Litecoin have in recent times been fighting a losing battle against regulators.

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