China is shutting down domestic Bitcoin exchanges

China might be banning Bitcoin exchanges

China might be banning Bitcoin exchanges

The country accounts for about 23 percent of bitcoin trades and is also home to numerous world's biggest bitcoin miners, who confirm transactions in the digital currency.

BTC China, the second-largest exchange, has responded to the crackdown with its own statement. While existing users will likely still trade, according to Zhou Shuoji, a founding partner at FBG Capital interviewed by Bloomberg, it will make it more hard for new users to start trading Bitcoin-thereby limiting Bitcoin's potential growth.

While Beijing's motivation for the exchange ban is unclear, it comes amid a clampdown on financial risk in the run-up to a key Communist Party leadership reshuffle next month.

It is still unsure whether the report of Caixin on the ban on bitcoin exchanges is accurate and if the Chinese government is considering imposing a temporary suspension on its local trading platforms. As regulations tightened, China's share has slid to less than 30%. The process is fast and easy with convenient and advanced trading platform (desktop and mobile), low spreads and instant execution. The three largest exchanges, OKCoin, BTC China and Huobi, account for 60% of Bitcoin trading in the country.

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Bloomberg and the Wall Street Journal are reporting that China will move to shut down bitcoin exchanges, citing unnamed "informed sources".

Cryptocurrency-based fundraising has boomed in China since a year ago because of astronomical gains in value, but the activities also fueled regulatory concerns as they have largely fallen outside government supervision. The Chinese bitcoin exchanges have also confirmed that they have not received any such intimation from the authorities and this has helped the bitcoin prices to bounce again from the $4000 region for the second time in a week. With China being such a huge country, and one of the biggest Bitcoin miners in the world, it's no wonder that the price dropped significantly.

"Whenever you start to hear about Hong Kong taxi drivers becoming millionaires from buying bitcoin, you start to think this is not necessarily driven by fundamentals", he said.

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