Bitcoin sunk to a low of $3977 as fear persists over China shutting down local cryptocurrency exchanges. Today, the likes of Bloomberg and WSJ reported that The People’s Bank of China (PBoC) is indeed planning to ban exchanges in the country. They suggested the ban will be limited to exchange-based trading and will not affect over-the-counter transactions.
Over the weekend Bitcoin tried to cross the resistance level of $4500, but failed because of subsequent sell offs by the bearish news out of China. Bitcoin continues to trade sideways since there is no news directly from the PBoC for the past 3 days. The central bank has neither confirmed the ban nor denied the rumours.
However, Bitcoin has continuously found support at the psychological level of $4000 — indicating that investors don’t think China will go ahead and shut down the exchanges, and even if they did, the impact would be very limited.
This isn’t the first time China has interfered with cryptocurrencies. Back in February of this year, Bitcoin prices slumped when the Chinese exchanges halted withdrawals of digital currencies.
In the worst case scenario if China does go ahead with the ban, we would likely see Bitcoin extending this correction to $3700, and then recovering back to $4000 — as it had been doing after every news coming from China over the past week.
A good thing to know: Trading volumes by Chinese Bitcoin trading exchanges are close to reaching all-time highs and in terms of daily trading volume, China has already surpassed the US.
Top Stories from the Crypto World
1. China’s Bitcoin trading volumes are on the rise despite exchange ban talks
There is a significant increase in the daily trading volumes of Chinese Bitcoin exchanges despite the exchange ban talks. The number has surged above 45,000 Bitcoins — nearly double that of the US Bitcoin exchange market.
Although, at the time of writing, Bitcoin is being traded at $3938, while the global price is $4176. Chinese exchanges have demonstrated low trading rates for the Bitcoin-to-Chinese yuan pair throughout 2017.
2. Bitcoin confiscation now illegal in South Korea
A South Korean district court declared that ‘bitcoin is not subject to confiscation’ after authorities seized 216 bitcoins from an individual charged with operating an illegal pornography website.
The court further explained that cases wherein virtual currencies are gained as criminal profit, any confiscation should only be considered by calculating the corresponding amount of the criminal proceeds, rather than confiscating the virtual currency altogether.
3. BTC-e opens user support tool
BTC-e, which was shut down following the crackdown by US authorities, began allowing account withdrawals earlier this month.
In another update, the exchange outlined that it would only be responding to certain queries (primarily related to withdrawals and deposits made between July 25 and August) until it launches its new trading platform on September 15.
It is good to see BTC-e coming back to life and promising to return users’ funds. Although, earlier the exchange had claimed that they only have partial access to the funds. It would be interesting to see which approach BTC-e takes to refund their users.