China's exchanges shut down, billions of dollars evaporated from the digital currency market overnight

The news of "Bitcoin exchange closure" came true, the decline of Bitcoin was staggering, and digital currencies collapsed across the board.

Shut down the digital currency trading platform, the thrilling 3 hours of digital currency

At 4 p.m. Beijing time on September 14, China Business News published an article titled "Regulators: All Bitcoin trading platforms will be shut down and exit the market in the near future," stating that regulators have made a final conclusion on domestic Bitcoin trading platforms: "All will be shut down and exit the market in the near future." The article triggered turmoil in digital currencies and kicked off today's plunge.

At 5:40 pm on the 14th, China Business News published another article, saying that Shanghai had issued a verbal notice to shut down Bitcoin trading platforms by the end of September. Domestic digital currencies fell in response, with Bitcoin falling by about 10%. In the international market, Bitcoin also fell by about 3%.

At 7 p.m. that evening, Bitcoin China’s official Weibo account released an announcement, saying that the digital asset trading platform would stop registering new users starting today, and that the digital asset trading platform would cease all trading operations on September 30, 2017.

Subsequently, traders on the platform frantically sold digital currency assets, causing the digital currency RMB trading price to plummet. Bitcoin once plummeted 32%, Litecoin once plummeted 57.3%, and Bitcoin Cash once plummeted 72.32%.

As of the last update, Bitcoin, Litecoin, and Bitcoin Cash have generally seen narrower declines, at approximately 21%, 31%, and 21%, respectively.

Bitstamp data showed that during the U.S. trading session on Thursday, the trading price of Bitcoin was close to $3,250, with a daily decline of about 16%. Ethereum was close to $220, down about 20%. Litecoin fell to a low of $46.28, with a daily decline of about 25%.

As of the last update, Bitcoin, Ethereum, and Litecoin were down approximately 13%, 15%, and 21%, respectively.

Although the declines in both domestic and foreign digital currencies have narrowed, Thursday's blow has added salt to the wounds of digital currency holders this month.

Data from digital currency website Coinmarketcap shows that after a sharp drop on Thursday, the total market value of all cryptocurrencies has evaporated by almost $60 billion since reaching a record high at the beginning of this month.

Among the three major domestic bitcoin exchanges, the other two, except Bitcoin China, have not yet announced any closure. Huobi said it has not received any clear documents or notifications, and OKCoin also said there is no further news.

Caixin reported that this time it is only the virtual currency trading in China that is banned, not all virtual currency and legal currency trading in China. Its sources said that it is the Bitcoin exchange that is closed, not Bitcoin, and the ban on Bitcoin exchange-related activities will not affect the development of blockchain technology.

Charles Hayter, founder of the data analysis website Cryptocompare, believes that China's ban has caused market panic because the signals released are complex and unclear, which has led to negative market sentiment. The closure of Bitcoin China may be an ominous sign for other Chinese digital currency exchanges.

The price difference of Bitcoin between China and abroad once reached 7,000 yuan

The news of the closure of the Bitcoin China trading platform caused great panic among the traders on the platform. The selling of Bitcoin and cash withdrawals flooded like a tide, causing the platform's 24-hour trading volume to surge to 27,430 Bitcoins, which was converted into about 550 million yuan.

When panic was at its peak, Bitcoin was pushed down to 17,000 yuan, a 32% drop from 24 hours ago. At this time, on the largest digital currency trading platform in the United States, the price of Bitcoin was 3,655 US dollars, which is still 24,000 yuan when converted into RMB. The price difference between Bitcoin in China and the United States once reached 7,000 yuan.

Bottom-fishing? Arbitrage? Bitcoin domestic price rebounds 10%, international price falls further

The price difference between Bitcoin at home and abroad did not last long. In less than three hours, the difference between the two began to narrow significantly.

Some digital currencies on the BTC China platform rebounded across the board. As of press time, Bitcoin on the platform was trading at 20,380 yuan, with the decline narrowing to 20.4%; Litecoin's decline narrowed to 27.15%; Ethereum's decline narrowed to 28.49%; and Bitcoin Cash's decline narrowed to 37.45%.

In the international market, the decline of virtual digital currencies has generally widened. The USD price of Bitcoin once fell by about 16%, and the decline of Ethereum and Litecoin was close to or exceeded 20%. As of the latest update, the decline has narrowed.

If one had “bottom-fished” when the Bitcoin China panic was at its worst, the returns would have been: Bitcoin, 10%; Litecoin, 30%; Bitcoin Cash, 35% at the time of writing this article.

Bitcoin has plunged more than 20% since September, evaporating $20 billion

Under the current heavy-handed regulatory environment, the situation facing digital currency is not optimistic.

Since September, Chinese regulators have first banned ICOs and then shut down domestic Bitcoin exchanges. The intensity of regulation on digital currencies is unprecedented.

This regulation directly led to a sharp drop in the price of Bitcoin. According to worldcoindex data, since September 1, Bitcoin has fallen from $4,800 to $3,491, a drop of 28%, and its market value has shrunk by nearly $20 billion.

During the same period, the prices of Ethereum and Litecoin in the international market both fell by more than 40%.