Closure of Chinese BTCC Provides Opportunities for Other Asian Markets

Independent decision by the board of BTCC, one of the largest Chinese Bitcoin Exchange led to significant drop in the prices of Bitcoin. However, Huobi and OKCoin - other two leading exchanges are operating normally and denied any such intimation from Chinese financial regulators

Closure of Chinese BTCC
Closure of Chinese BTCC

In New York, the bitcoin traded at $3,539.88 at 10:04am. This is way below the all time high reached earlier this month at $5,013.91. There is a 9 percent fall on Bitcoin prices on Thursday, 14th September 2017 after the news spread that BTCC, one of the biggest Bitcoin exchanges of China, BTCC announced to shut down its operation.

BTCC China has tweeted on Thursday regarding its operation being closed down by Sept. 30 because of the cracking down of the cryptocurrencies by the Chinese authorities.

It is quite some time now that China has resorted to tighten its grip on this rising currency.  Caixin, the Chinese media outlet on Sept. 4, 2017 reported that the companies are banned by the regulators to raise money through ICOs (Initial Coin Offerings). They have referred the ICOs as an unauthorized fundraising tool with likelihood of involvement in financial scams. From this time onwards, 20 percent of the value of bitcoin is lost.

CEO of JPMorgan has been particularly critical of cryptocurrencies, “It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed.

There is still high trade of Bitcoin taking place in India. Other major crypto markets including the US, Japan, India and South Korea are still operating normally. Regulatory speculations in China and other countries will lead to price volatility of cryptocurrencies for sometime but there is no risk or threat of closure as many major economies are adopting digital currencies at the government level.

In an article recently written and published by Forbes, Stanislav Glukhoedov, CEO of Prosense, a virtual reality broadcasting service based in Moscow said, ”We expected toughening in ICO and crypto-currencies regulations in China for some time already. The Chinese government might consider the idea of a decentralized economy as one of the major threats to the existing regime.”

Stanislav further added, “On the other hand, maybe increased attention from governments can help clean up the ICO market from scammers and we suppose that in the near future the number of teams planning new projects through ICO mechanisms will be reduced, and those who will stay will be strong, serious companies.”

The Peoples Bank of China (PBOC) is hiring people having expertise on digital currency related fields. With such moves, Chinese regulators want to understand the virtual currency world. However, regulatory development in the Chinese crypto market would provide ample opportunity for other mature and already regulated markets like Japan and South Korea. It will be interesting to see how Indian crypto market reacts in the long run!