Bitcoin era ends in China

By Xie Jun Source:Globaltimes.cn Published: 2017/9/30 16:31:05

Popular virtual currency trading platform in China close all trading functions


The curtain fell on China's virtual currency trading Saturday, including trading of the world's most popular token, Bitcoin.

btcchina.com, a popular virtual currency trading platform in China, closed all of its trading functions, including trades between the yuan and digital assets as well as trades among digital currencies.

Along with btcchina.com, other popular token trading platforms like huobi.com and jubi.com also announced around mid-September that by the end of the month, they would inform all their users that they would stop their trading business involving crypto-tokens. 

Ending of virtual currency trade in China comes as the government launches gradual steps, taken since the beginning of this month, to rein in the recklessly developing token market. 

On September 4, a number of government departments launched a notice that outlined the banning of Initial Coin Offering (ICO). ICO refers to a process whereby companies would publicly raise virtual currencies - mostly Bitcoins - by issuing new crypto token.

Zhang Yinhai, a veteran trader who started trading tokens in 2011, said he had anticipated such governmental measures, but he nevertheless decided not to sell off his Bitcoin assets, the exact amount of which he wished not to disclose.

"When I first started to invest in Bitcoins, I used about 10 to 20 percent of my assets to buy Bitcoins, and I had always mentally prepared for the fluctuation of the currency. Even if the Bitcoin falls to nothing in value, I can accept that. It's more or less a bet," he told the Global Times on Saturday, saying that he had no interest in short-term trading of Bitcoin for quick money. 

By 12:00 pm on Saturday, a Bitcoin cost about 28,158 yuan ($4,232) on btcchina.com, up 3.56 percent compared with the previous trading day. By the end of September, one Bitcoin should cost about 29,180 yuan. 

‘‘Bitcoin trading in China used to account for about 90 percent of the globe's trading volume[of the currency], but the percentage has [drastically] plunged to less than 9 percent since the government rolled out the ban on ICO [earlier]in September. Therefore, now, the Chinese market only exerts a very limited influence on the Bitcoin's price," Zhang noted. 

On Friday, Japan issued operating licenses to 11 Bitcoin exchanges, coindesk.com reported the same day. This might have offset the influence exerted by the Chinese government's management on virtual currency trading, Zhang said. 

Business as usual 

The businesses of domestic virtual currency platforms are still operating as normal, and some of them, like huobi.com, are even recruiting more people, according to domestic media reports. 

Huobi.com said that it isn’t taking interviews at the moment when contacted by the Global Times on Friday. 

Btcchina.com also declined to comment when contacted by the Global Times on Saturday. 

A virtual currency expert surnamed Guo said that, as virtual currency trading business has stopped, exchanges need to look for new opportunities. "Whether they can succeed depends on their own capabilities," Guo told the Global Times on Friday.

Currently, some exchanges, like btcchina.com, still preserve the business of mining. 

"Mining as well as trading of mining machines are very profitable businesses," Zhang said.

Further measures to come

Rumors have also arisen that the government’s management will soon tighten further. According to a report published bycryptocoinsnews.com on September 18, the Chinese government is planning to extend the Bitcoin exchange ban to over-the-counter (OTC) trading. 

In some virtual currency WeChat communication groups, the Global Times saw that many people are offering to trade tokens in secret.

There are also companies that offer such businesses. One of such OTC platforms is localbitcoins.com, which on its official website describes itself as a peer-to-peer Bitcoin trading platform. There is no direct contact information such as a telephone number on its website as of 3.00 pm Saturday. 

"Technically, it's very hard for the government to completely ban such fragmentary private trading, but I don't think those methods will become common," Guo noted.

Zhang also said that a large number of investors will just give up trading tokens after this new wave of measures. 


Posted in: ECONOMY

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