The latest bitcoin news out of China has confirmed recent rumors and traders' fears about a widespread crypto-crackdown, sending the price of bitcoin world-wide spiraling lower to levels it hasn't touched since the beginning of the -quot;summer of bitcoin.-quot; Information appearing from China appears to confirm that trading will no longer be legal for Bitcoin-to-fiat platforms. According to market regulators, all exchanges must close by the end of the month.
Beijing market regulator requires all virtual currency exchanges (ie. OKcoin and Huobi) to stop trading by end of today.
-mdash; Luna Lin (@LunaLinCN) September 15, 2017
The price is down 20% this morning, adding to a similarly large drop yesterday, slipping below $3,000 for the first time since mid-July.
Across all the major Cryptocurrencies, it's a bloodbath
Cryptocurrency CEOs reacted to the latest developments outof China: several industry players told Cointelegraph that while markets were reacting harshly to Chinese regulatory moves, the long-term benefits for Bitcoin-rsquo;s ethos and therefore stability were clear.
-ldquo;The price is always a solid metric of the markets-rsquo; greed and fear, and reflects regulatory uncertainty at the moment,-rdquo; Leverj CEO Bharath Rao commented. -ldquo;This also signals that development of non-custodial and decentralized models will accelerate.-rdquo;
-ldquo;Regulation is neither necessary nor possible for decentralized models, and the future may have gotten just a bit brighter by nudging the crypto community to develop high speed, non-custodial exchanges.-rdquo;
Of course, Chinese investors are notorious for their bubble-chasing (and forming) and short-term trading activities, which repeatedly influenced Bitcoin volatility in the past. The latest regulatory warnings produced a second mass exodus to p2p trading platforms such as Localbitcoins this year.
With sanctioned Bitcoin-to-fiat trading looking to stop in China altogether, a major market influence will disappear, but some doubt this will last:
-ldquo;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,-rdquo; Jason English of Blockchain alliance Sweetbridge continued.
-ldquo;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.-rdquo;
* * *
Meanwhile, in a suggestion that Beijing may be getting a modest case of buyer's remorse, overnight that Li Lihui, a senior official at the National Internet Finance Association of China urged Chinese regulators to create a regulatory framework to support the development of digital currencies, Reuters says, citing Li who spoke at an event in Shanghai. Li, a former president at Bank of China, said global regulators should work together on virtual currencies, suggesting that while China may well be interested in cryptocurrencies, it wants to assure it has complete control over the capital-control evading protocol.
For now, however, as the recent price suggests, traders are stuck in -quot;sell first, ask questions later-quot; mode.