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Bitcoin prices are dropping after BTCChina halts trading on regulators' concerns

16 September 2017
Bitcoin prices are dropping after BTCChina halts trading on regulators' concerns

Overall, confidence in cryptocurrencies has been on the rise for years, and people are still likely to be drawn to its potential for rapid gains.

Shanghai Financial Service Office has also ordered to close down bitcoin trading platforms in the city, China Business News reported, citing an unidentified person.

Both exchanges said the decision to cease trading was triggered by an announcement by Chinese authorities last week banning initial coin offerings (ICOs), in which companies issue "digital" tokens similar to shares in exchange for bitcoin or other cryptocurrencies.

That ban, as well as warnings by regulators in other countries, has driven fears of a wider crackdown and prompted a sell-off that has helped wipe nearly $60 billion off the total value of cryptocurrencies since they hit record highs at the start of the month, according to industry website Coinmarketcap. The Chinese central bank said those who have already raised money should pay it back.

As one of the biggest bitcoin exchanges in China stopped trading following new Chinese Government rules shutting down all virtual currencies, Bitcoin's worldwide value plunged by almost a third from the record highs it had hit this month.

"We will stop all trades on the digital trading platform starting September 30", it said.

Crypto to crypto trading will still be allowed and exchanges, for now, if they choose, can carry on business without uncertainty on the RMB issue.

Levitt said he would avoid investing directly in bitcoin due to its wild price fluctuations that are "hard to understand". By 1233 GMT, it was down 18 percent on the exchange, at 20,510 yuan. According to publically available data, approximately 95 percent of global exchanges from traditional fiat currency into bitcoin are from purchases in the Chinese renminbi. On September 14, BTCC, one of China's biggest exchanges, announced that it is halting trade in response to a notice from Chinese regulators. The other major dealers - OKCoin.com and Huobi.com - were operating normally as of yesterday.

"I would fire them in a second, for two reasons: It is against our rules, and they are stupid, and both are risky", Dimon said, as quoted by Reuters.

When the Chinese government announced a ban on initial coin offerings last week, it looked like an attempt to rein in the speculative excesses of the cryptocurrency economy.

The selloff accelerated on Tuesday, after J.P. Morgan Chase CEO Jamie Dimon called the cryptocurrency a fraud that was "worse than the tulip bulbs" and that "won't end well".

It's been a rough month for bitcoin investors.