Chinese bitcoin exchange to stop trading, price plunges 16 percent

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Chinese bitcoin exchange BTCChina announced Thursday that it will stop all trading at the end of the month, ending days of speculation and causing the price of the digital cryptocurrency to fall by more than 16 percent.

BTCChina, one of the largest bitcoin trading platforms in China, said it had reviewed a recent announcement from Chinese regulators and decided to stop all trading on September 30. Registration for new users was stopped immediately.

The announcement followed nearly a week of uncertainty about the future of bitcoin exchanges in China. While the country has long held a negative view of the digital currency, a report last week claimed that the Chinese government was planning to shut down local bitcoin exchanges.

“The Chinese ban is causing a panic in the market as mixed messages and lack of clarity has turned sentiment negative,” Charles Hayter, founder of data analysis website Cryptocompare, told the Reuters news agency.

Thursday’s news caused the price of the digital currency to fall by $644, or 16.6 percent, to $3,230, according to CoinDesk. The price of bitcoins regained some ground on early Friday morning, when the rate climbed $124, or 3.8 percent.

Despite this month’s volatility, the price of bitcoin has risen sharply so far this year, going from $1,000 on January 1 to $5,000 on September 2. The increasing price has been driven by a number of factors, including increased interest in India, Venezuela, and China.

Bitcoins are intended to serve as an alternative for normal currencies and is not controlled by any country or central bank, making it an easy way for people to do business beyond the reach of government regulation. But the digital currency has suffered huge security breaches in the past and its exchange rate can rise or fall rapidly.

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