9/15/17 – Bitcoin China
Tracking the wild price movements of the world’s most popular cryptocurrency.
As of September 14, 2017, the news from China is that the government will shut down all local Chinese virtual currency exchanges. These new regulations compel any company or business that is exchanging virtual currency to cease operations by the end of September; approximately two weeks from now. This action was part of a wider crackdown on virtual currency activity in the communist country.
The disappointing news came just days after Chinese authorities banned all ICO cryptocurrency fundraising activity. The Bitcoin price in U.S. dollars on Sept. 15, 2017, was about USD 3,370. This price level is much lower than the all time high of around USD 5,000 just a month earlier in August. The main issue causing Bitcoin’s price to fall is panic selling caused by the Chinese government’s action in stopping ICO fundraising and closing local exchanges.
Everyone is asking the same questions:
1. When will the wild ride end?
2. How low will it go?
Over the past three years, the Chinese market has grown into a leading force for Bitcoin trading and mining. Around two-thirds of all new Bitcoin was mined through Chinese servers. China’s Bitcoin trading volume accounted for approximately eighteen percent of all global exchange capacity. The country was the world’s largest cryptocurrency marketplace. All that trading activity will be ending by October 1st.
The new Bitcoin price also takes into account that Chinese mining pools and international exchanges will continue operations. Additionally, it is unclear whether the crackdown will extend to all forms of cryptocurrency trading though peer-to-peer trading platforms and other decentralized exchanges; such as Bisq. One action is evident, all Chinese OTC trading and exchange services will cease by month’s end, or those operators will be faced with the wrath of Chinese enforcement.
What will happen to the price?
It is evident from the worldwide surge in cryptocurrency usage over the past three years, that Bitcoin will remain on an upward growth trajectory. Most experts agree that the Chinese crackdown will only cause a geographic distribution of miners, ICOs, and exchange trading. India is now looking towards approving virtual currency for its citizens and could be a possible destination for future Bitcoin exchange activity.
The drop in Bitcoin price does not indicate a slow down in common cryptocurrency use around the globe, nor any damaging change in core blockchain applications. Chinese panic selling caused the current temporary Bitcoin price drop and that lower price may not be around long. The lower BTC prices are temporary and have created a buying opportunity.
How low will Bitcoin value fall is anyone’s guess?
How long before Bitcoin price will resume its rise towards $10,000 per coin?
Your estimated timeline is as good as the next guys.
At Bitcoin’s present valuation, that old salesman’s pitch sounds about right, “If you liked it at $5,000, you should love it at $3,000. Buy more Bitcoin.”
Lower prices from the Chinese trading sell-off have also hit the Ethereum platform. Ether, as priced in U.S. dollars, fell below $250 on Sept. 14th, the day of the bad news. This price level is a six week low for the cryptocurrency. However, unlike Bitcoin, many traders focused on Ethereum are calling the deflated Ether price an expected selloff and some are predicting even lower prices. Earlier in the summer Ether had topped $400.