Bitcoin Prices Drops After News From China
The prices of Bitcoin and other cryptocurrencies have taking a break from their climb on Monday. China has now launched an effort to target the cryptocurrency marketplace. The cryptocurrency went into a massive drop, some may even call it a free fall, which came after China said that it was going to ban cryptocurrency exchanges.
Since then, it has remained in a downward trend with the value of bitcoin plummeting to near $4,000. Caixin, a Chinese media outlet first reported on the ban late last week. Today, there were several follow-up reports that China would halt trading of digital currencies on their domestic exchanges. They would, however, allow over-the-counter transactions.
OKCoin and Huobi, two of China’s largest bitcoin exchanges explained that they have not had any push from governing bodies to pause cryptocurrency trading. The central bank of China has also not given any statement regarding these reports.
China had originally decided to ban initial coin offerings a while back. Though these have become a very popular method for start up companies to gain financing, these funds are generated virtually. Some are against the practice and are saying that of al of the ICO’s that have been underway in the market, many of them could be scamming investors into putting their money into a false corporation. Unregulated transactions of cryptocurrency have been a red flag to some because there is little due diligence needed to raise money by a digital currency or cryptocurrency ICO.
In fact, Beijing has come out to say that ICOs are an illegal means of raising funds for a company.China has also made a point to pursue further steps to stop customers from withdrawing bitcoin earlier this year while also letting them resume withdrawals earlier this summer. The facts still remain that this new form of currency (in the grand scheme) has a lot of kinks to work out as more countries attempt to adopt it as a means for transactions and fund raising.