Sources familiar with a cross regulators board that manages online finance ventures told Chinese financial publication Caixin that officials plan to close key bitcoin exchanges in China.
The news was not quickly able to confirm the report. But two references in direct contact with executives at three Chinese Bitcoin exchanges Beijing-based OKCoin, Shanghai-based BTC China, and Beijing-based Huobi said the programs told them that they have not taken anything from the Chinese government.
The news follows China’s move earlier this week to ban so-called “initial coin offerings,” or the method of creating and selling digital coins or marks to investors in order to fund start-up projects.
Greg Dwyer, the market branch manager at crypto-currency exchange platform BitMEX, said there was skepticism over whether China would secure Bitcoin transactions following the ICO ban.
“If this sets out to be true, then this sell-off is completed, and we could see additional downside over the weekend, as it could indicate the large Bitcoin/Chinese yuan exchanges will need to halt trading,” he added.
Bitcoin dropped to a low of $4,227 on the BitStamp App and last traded at $4,309.80, down 6.6 percent. On Sept 2, it hit a life high of nearly $5,000.
Sharp ends such as Friday’s are par for the area for an asset like Bitcoin, investigators said. Over the way of its eight-year history, Bitcoin has on a regular basis risen as much as 18 percent and fallen as much as 13 percent.
Still, Bitcoin was still up almost 346 percent this year.
John Spallanzani, chief macro strategist at GFI Group, said Friday’s trials could be short-lived. “Bitcoin is here to stay,” he said.
Jehan Chu, a partner at Jen Advisors, a Hong Kong-based early-stage blockchain venture capital firm, wrote that should China shut down bitcoin exchanges, it will not be the edge of the crypto-currency world in the country.
Blockchain, a digital ledger of activities underpinning Bitcoin, has leaped to influence as it enables users to track and record assets over all industries.
“This is just China pressing the ‘Pause button,” said Chu.
A big part of Bitcoin’s current surge was the ICO craze, which split this year. Bitcoins and Ether, another digital currency, are utilized to purchase tokens for ICOs.
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