Unconfirmed news reports on social channels based on leaked documents are indicating that all Chinese virtual currency exchanges have been instructed to shut down today by the office of the Leading Group of Beijing Internet Financial Risks Remediation.
While Bitcoin prices were already on a decline after an earlier announcement from China which banned ICOs, the recent uncertainty has resulted in the world’s leading crypto currency to drop to $3,000 – a stark decline given that very recently it touched an all-time-high of over $5,000.
The downward spiral continued this week as discouraging news kept coming out of China, including the shutting down of exchanges like BTCChina and ViaBTC.
Interestingly, JPMorgan’s CEO Jamie Dimon also commented on Bitcoin earlier this week while speaking at an event, calling the currency a fraud - fit only for citizens of countries like Venezuela and for murderers and drug dealers.
The Crypto market saw an overall boom in the last 18 months and particularly this year, with currencies like Ethereum giving 40x ROI to investors.
However, many, like Jamie Dimon believe the market is in a bubble currently and “someone is going to get hurt” down the line.
Several other high-profile industry stakeholders have also commented on the situation and not all were negative. Renowned businessman John McAfee earlier challenged Jamie Dimon’s claims and supported Bitcoin.
The major challenge the crypto space is facing right now is that of regulations as countries begin to notice the recent market growth and trends.
China, home to the majority of Bitcoin miners, has always been a major player in the market, with Chinese investors regularly swaying Bitcoin prices by their short-term trading strategies.
The ICO ban in China was also a major blow to crypto growth, but the regulatory agencies cited the instances of fraud as the reason behind the decision.
Many experts believe these are temporary measures however, and will be replaced with regulatory frameworks.
According to Jason English of the Blockchain Alliance Sweetbridge:
“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.”
Crytpocurrency supporters also believe the shutting down of crypto exchanges may be the push needed for decentralized exchanges to emerge.
Currently Bitcoin seems ready to drop under $3,000 while Ethereum is testing $200 and Litecoin is fluctuating around $38.