As China’s BitKan announced it would officially ban both over-the-counter bitcoin and bitcoin cash transactions, bitcoin fell to around $3,800, denoting more than 20% drop in value, after reaching almost $5000.
According to TheStreet, BitKan informed that as the trading of initial coin offerings or ICOs is also suspended, the ban on bitcoin was the next logical step to take. The one huge advantage OTC bitcoin trading poses to investors is their ability to access very competitive spreads, pricing and do it without an official exchange.
After the Central Bank of China announced it will suspend fundraising via digital currency, slandering it as “illegal”, and with the People’s Bank of China announcing 90% of all ICOs in China to be a fraud, then BitKan followed with the banning of OTC bitcoin, as well.
ICOs are also banned, with 60 ICO platforms being under regulatory scrutiny.
However, according to the TheStreet, China is planning on launching its own digital currency that will trade on their exchanges. Despite the strict regulations in China, TheStreet announced that none of the major Chinese exchanges such as OkCoin BTC China have halted trading bitcoin.
The fear from the Chinese regulations affecting the popularity of bitcoin and alike-products has contributed to the price drop of bitcoin. Overall, 80% of all cryptocurrencies are falling in free fall, after bitcoin slipped to $3,777. With Chinese investors going out of their positions in bitcoin and bitcoin cash, which is one of the most traded digital currency in China, the price is expected to fall even further.
In addition, the fall in bitcoin price levels was also bolstered by JP Morgan’s CEO Jamie Dimon, who referred to bitcoin as a “fraud”. The immediate price drop was 1%.