Bitcoin crashed by as much as 10 percent Thursday after China’s second-largest bitcoin exchange announced it will stop trading the cryptocurrency at the end of September. The move comes as Chinese authorities continue to clamp down on the world’s most valuable cryptocurrency, which has lost 25 percent of its value in the space of a week.
BTCChina announced its decision to suspend trading on Sept. 30 via its Weibo and Twitter pages. “After carefully considering the announcement published by Chinese regulators on Sept. 4, BTC China Exchange will stop all trading on Sept. 30,” the company said.
BTCChina, which is the oldest cryptocurrency exchange platform in the world’s biggest bitcoin market, said while it would immediately stop accepting new users, its other operations would continue, including bitcoin mining pools and international exchange.
China has become the center of bitcoin trading and mining in recent years, mainly because of a lack of regulation. But that is all now set to change.
The decision comes as Chinese media outlets report that bitcoin exchanges in Shanghai, where BTCC is based, have been issued with verbal orders to cease operations by Shanghai’s Municipal Financial Service Office.
While speculation about a nationwide ban on bitcoin exchanges in China has been reported for a number of days, there has yet to be an official decree from either the People’s Bank of China or the government in Beijing.
On Wednesday the Chinese National Internet Finance Association (NIFA), a group formed by the government and populated by representatives from some of the country’s largest online financial firms, issued a statement which questioned the legal basis for cryptocurrencies.
The most recent fall in bitcoin’s price — to $3,413 — comes after following negative comments from JPMorgan Chase CEO Jamie Dimon where he predicted ultimately it will be shut down. “It’s just not a real thing; eventually it will be closed,” he said. China moved to ban initial coin offerings (ICOs) after the PBOC said that 90 percent of the ICOs launched in China were found to have been fraudulent.
While the drop in bitcoin’s value in the space of the last week is significant — wiping around $20 billion off its market cap — when you look at the value of bitcoin in the last year, it has still seen huge growth, from around $600 in September 2016, to over $5,000 earlier this month.