Bitcoin price update: Cryptocurrency rises back from China exchange shut downs
BITCOIN'S price has jumped back towards $4,000, as the cryptocurrency staged a recovery after China closed down exchanges BTCC, OkCoin and Huobi in a move that has prompted a major crash in recent day.The value of the digital currency is now hovering at around $3,680 after tumbling below $3,000 on Friday amid fears the bitcoin bubble was bursting.
Bitcoin's price had surged by around 700 per cent over the past 12 months to hit record highest of near $5,000.
But the bottom appeared to fall out after the Chinese government carried out a major crackdown.
BTCC has now announced it will end trading at the end of the month, with OkCoin and Huobi closing at the end of October.
A Chinese government notice said: "All trading exchanges must by midnight of Septermber 15 publish a notice to make clear when they will stop all cryptocurrency trading and announce a stop to new user registrations.”
Platforms must also tell the government by September 20 how they will allow users to make withdrawals in a risk-free manner and handle funds to make sure investor interests are protected.
The price also came under pressure after JP Morgan boss Jamie Dimon called bitcoin a fraud, and promised to fire staff dealing the digital money for being "stupid" and "dangerous".
China previously announced it would ban initial coin offerings, which are used to raise funds with new digital tokens.
The two moves from the world's second largest economy signal a significant hostility towards bitcoin and crypto currencies.
But experts said the actions won't have much impact beyond the short-term.
Charles Hayter, founder of cryptocurrency analysis website Cryptocompare, said: “Chinese volumes account for less than 10 percent of global volume - they are no big deal."
Chinas actions won’t be effective for three reasons, according to David Coker, lecturer at Westminster Business School.
He said: “First, anyone in China with a valid public key - a large numerical value that is used to encrypt data and is generated by a software program or provided by a designated authority - can still receive and sell Bitcoin.
"Keys are freely available for the asking. The Great Firewall of China won’t be able to block Bitcoin traffic originating on Blockchain's decentralised network."
He added: “Second, it is well known foreign travel by Chinese citizens has surged in response to the crackdowns on capital flight.
"Any Chinese citizen traveling to the United States or Western Europe can easily purchase Bitcoin at any one of several thousand public ATMs selling the cryptocurrency.
“Third, the history of economics teaches us capital always finds a way. Financial markets exist to channel capital from where it is to where it wants to go. Much as land yields to the flow of water, regulations restricting the free flow of capital eventually yield as well. Capital always finds a way.”
Other countries have also moved to regulate bitcoin in recent weeks, with Australia recently introducing new measures targeting criminal use of the cryptocurrency and strengthened the Anti-Money Laundering And Counter Terrorism Financing Act.
However, the adoption of bitcoin by a number of celebrities has helped the cryptocurrency into the mainstream.
Underwear entrepreneur Michelle Mone recently announced the launch of £250million luxury property development in Dubai, priced in bitcoin - claiming the currency is the future.
Source: Express.co.uk
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