There was more bitcoin drama this afternoon, after the cryptocurrency slid more than seven per cent on rumours China is planning to shut local exchanges.

Bitcoin slid as low as $4,241 in afternoon trading in the UK, while Ethereum was also hit, falling to $294.

The news followed rumours in Chinese media that the government is planning to shut down local cryptocurrency- exchanges.-

Earlier this week bitcoin- plunged more than 20 per cent after Chinese regulators banned initial coin offerings- (ICOs), which allow companies to issue digital tokens in return for equity, and have become increasingly popular in recent months.

Having broken through the $5,000 barrier last weekend, bitcoin fell as low as $3,900 on Tuesday on news of the ICO regulations. Today it jumped- as high as $4,686, before falling back this afternoon.-

This week Chris Carter, a cryptocurrency expert, argued in City A.M. that the Financial Conduct Authority (FCA) should follow China's lead by banning ICOs.-

-quot;The digital currency universe has swollen in size in just 12 months from $12bn to near $180bn and many, including the fabled celebrity-class, have profiteered at the expense of their doting fanbases who haven-rsquo;t a clue what they are buying into,-quot; he said.-

-quot;ICOs are an ugly offshoot of the wider digital currency universe, presently in the midst of a massive speculative bubble. Deliberately over hyped by a nexus of extremely effective marketing, these assets are driving a neo-penny stock scam in the form of so-called 'digital currency'.

-quot;Disappointingly, thus far we have heard nothing from the FCA on these con artists. If someone there is reading this, I entreat you to ban ICOs on our shores this instant.-quot;

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