Bitcoin plummets by 20% as China orders shutdown

Bitcoin, the best-known crypto currency took a tumble of 20% this week as China’s biggest virtual currency exchange announced yesterday that it would cease trading by the end of September. 

The announcement by the exchange BTTC followed the news a fortnight ago that the Chinese authorities had banned initial coin offerings.

The tightening regulations have been seen by some observers as a sign that the authorities are planning to outlaw virtual currencies and can be seen in light of the crackdown of bribery and corruption championed by President Xi Jinping (pictured left) who as reported by International Investment, earlier this year scorned “aggressive dealmakers” as “financial crocodiles”.

Following the announcement on ICOs on 5 September, two days the National Internet Finance Association, a state-backed body, fire a shot across the bows of virtual currency traders, saying that such currencies are being used as a tool for illegal fundraising and money laundering.

While a number of media outlets such as Reuters are reporting that virtual currencies are to be banned outright in China, the regulator — the People’s Bank of China — is yet to to make a formal statement, but few expect it not to make such a move.

As well as regulators moving against virtual currencies, they are coming under harsh scrutiny from the private sector.

This week, JP Morgan chief executive Jamie Dimon described bitcoin as “a fraud”, saying it will “blow up”.

He likened it to “tulip bulbs”, a notorious market bubble of the 17th century and said that if found any of his employees trading it he would “fire them in a second”.

 

ABOUT THE AUTHOR
Eugene Costello
Eugene Costello has been a journalist for some 20 years, and has written for a wide variety of UK and international newspapers and magazines.

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